the sirpur paper mills limited › bse_annualreports › 5024550314.pdf · the sirpur paper mills...

The Sirpur Paper Mills Limited

AnnualReport

2013-14

www.sirpurpaper.com

1

Corporate Information

2

10 year Financial Highlights

3

Notice

20

Directors’ Report

28

Management Discussion & Analysis

34

Report on Corporate Governance

AnnualReport

Contents

46

Independent Auditors’ Report

50

Balance Sheet

51

Statement of Profit and Loss

52

Cash Flow Statement

54

Notes forming part of the Financial Statements

75

Proxy Form

This Annual Report has been printed on maplitho paper manufactured byThe Sirpur Paper Mills Limited.

Design and production by CAPRICORN, Hyderabad

Forward Looking Statements

The Annual Report contains statements that

constitute forward looking statements including,

without limitation, statements relating to the

implementation of strategic initiatives and other

statements relating to our future business

developments and economic performance.

While these forward looking statements

represent our judgements and future

expectations concerning the development of our

business, a number of risks, uncertainties and

other important factors could cause actual

developments and results to differ materially

from our expectations.

These factors include, but are not limited to,

general market, macro-economic, governmental

and regulatory trends, movements in currency

exchange and interest rates, competitive

pressures, technological developments, changes

in the financial conditions of third parties

dealing with us, legislative developments, and

other key factors that we have indicated could

adversely affect our business and financial

performance.

The Company undertakes no obligation to

publicly revise any forward looking statements

to reflect future events or circumstances.

1The Sirpur Paper Mills Limited Annual Report 2013-14

BOARD OF DIRECTORS

Shri Ranjan Kumar PoddarChairman

Shri Devashish PoddarVice-Chairman & Managing Director

Shri Rameshwar Lall LakhotiaExecutive Director

Shri Laxminiwas Sharma

Shri P. Vaman Rao

Shri G.S. SrinivasanIDBI Nominee

Ms. Poonam Bodra

Shri Vedula Srinivas(w.e.f. August 11, 2014)

Shri P. Nagarajan(w.e.f. August 11, 2014)


REGISTERED OFFICE

5-9-22/1/1, 1st FloorAshoka ChambersAdarshnagarHyderabad - 500 063Telangana

CORPORATE OFFICE

Sirpur HousePlot No.39, Sector - 44Gurgaon - 122 003Haryana

MILLS

Sirpur-Kaghaznagar504 296Telangana

AUDITORS

Messrs. Deloitte Haskins & SellsChartered AccountantsSecunderabad

LEGAL ADVISERS

Shri S. Ravi, M.S. (Calif.), LLBAdvocate, Hyderabad

O.P. Khaitan & Co.Solicitors & Advocates,New Delhi

BANKERS

Central Bank of IndiaState Bank of HyderabadIDBI Bank LimitedAndhra Bank

COMPANY SECRETARY

Shri Dinesh Lata

REGISTRAR & SHARE TRANSFER AGENT

Venture Capital and CorporateInvestments Private Limited12-10-167, Bharat NagarHyderabad - 500 018

CIN: L21010TG1938PLC000591 | Website: www.sirpurpaper.com

BOARD COMMITTEES

AUDIT COMMITTEE

Shri P. Vaman Rao - Chairman

Shri Rameshwar Lall Lakhotia


Shri G. S. Srinivasan

Ms. Poonam Bodra

NOMINATION AND REMUNERATION

COMMITTEE

Shri P. Vaman Rao - Chairman


Ms. Poonam Bodra

STAKEHOLDERS’ RELATIONSHIP

COMMITTEE

Shri Laxminiwas Sharma - Chairman

Shri Devashish Poddar

Shri Rameshwar Lall Lakhotia

Shri P. Vaman Rao

CHIEF FINANCIAL OFFICER

Shri Vimal Arora

2 The Sirpur Paper Mills Limited Annual Report 2013-14


Particulars UOM 13-14 12-13 11-12 10-11 09-10 08-09 07-08 06-07 05-06 04-05

Production - Pulp, paper& board MT 89,256 83,085 99,543 93,900 91,126 92,298 72,146 75,828 78,883 78,490

Gross operating revenue ` Lakhs 44,728 376,52 410,61 379,32 349,35 368,47 271,16 270,42 268,65 254,29

Profit/(Loss) beforeinterest, depreciation & tax ` Lakhs (13,92) (28,54) 49,79 46,93 53,19 58,72 34,61 30,83 31,86 29,57

Profit/(Loss) beforedepreciation & tax ` Lakhs (62,14) (73,42) 7,92 12,19 19,31 26,61 28,51 25,77 26,09 23,91

Profit/(Loss) before tax ` Lakhs (90,98) (102,69) (22,07) (18,16) (10,45) (1,32) 16,79 15,32 16,18 15,28

Profit/(Loss) after tax ` Lakhs (90,98) (97,10) (17,31) (17,91) (11,85) (1,63) 32,62 13,32 14,59 14,10

Share capital ` Lakhs 16,99 16,44 15,89 15,89 15,01 15,01 15,01 15,01 11,01 8,35

Reserves & surplus ` Lakhs (45,38) 43,78 138,61 155,39 169,03 179,64 183,48 156,70 124,34 93,48

Shareholders' funds ` Lakhs (28,39) 60,22 154,50 171,28 184,04 194,65 198,49 171,71 135,35 101,82

Borrowings ` Lakhs 353,34 343,20 310,08 281,19 296,81 300,17 272,98 247,20 139,60 89,91

Deferred tax liability ` Lakhs – – 5,59 10,35 10,60 9,21 9,15 21,43 24,78 25,12

Net fixed assets ` Lakhs 356,24 382,83 408,41 436,15 461,10 480,48 483,30 418,59 259,07 168,15

Investments ` Lakhs – – – – 10 10 4,10 3,37 17,29 20,07

PBIDT to gross operatingrevenue % (3.11) (7.58) 12.13 12.37 15.23 15.94 12.76 11.40 11.86 11.63

PBDT to gross operatingrevenue % (13.89) (19.50) 1.93 3.21 5.53 7.22 10.51 9.53 9.71 9.40

Earnings per share ` (54.22) (60.80) (10.90) (11.42) (7.89) (1.09) 21.73 9.17 13.65 16.91

Dividend on ordinary shares % – – – – – 15 35 35 35 50

Book value per share$` (16.71) 36.64 100.81 114.38 129.66 135.80 138.32 128.66 145.45 152.20

Debt (Term loans)/Equity$

Times 11.10 5.12 1.65 1.45 1.36 1.19 1.03 1.13 0.70 0.43

Notes: a. UOM refers to unit of measure.

b. Revaluation of fixed assets not considered.$ Ignoring deferred tax liability


Notice

NOTICE is hereby given that the seventy fifth Annual

General Meeting of the Members of The Sirpur Paper

Mills Limited, will be held on Monday, the 29thSeptember, 2014 at 12.30 p.m. at 'BhaskaraAuditorium', B.M. Birla Science Centre,Adarshnagar, Hyderabad – 500 063 to transact the

following business:

Ordinary Business

1. To receive, consider, approve and adopt the

Audited Accounts of the Company for the year

ended March 31, 2014, together with Auditors'

Report and the report of the Directors thereon.

2. To appoint a Director in place of Shri Ranjan

Kumar Poddar (DIN: 00290949) who retires by

rotation at this Annual General Meeting and

being eligible, offers himself for re-appointment.

3. To appoint Auditors and fix their remuneration

and in this connection, to consider, and if thought

fit, to pass, with or without modification(s), the

following resolution as an Ordinary Resolution:

"RESOLVED THAT pursuant to the provisions

of Sections 139, 142 and other applicable

provisions, if any, of the Companies Act, 2013

and the Companies (Audit and Auditors) Rules,

2014, and pursuant to the recommendations of

the audit committee of the Company, Messrs.

Deloitte Haskins & Sells, Chartered Accountants

(ICAI Firm Registration No.008072S), 1-8-384

& 385, 3rd Floor, Gowra Grand, S. P. Road,

Begumpet, Secunderabad - 500 003, be and are

hereby re-appointed as statutory auditors of the

Company to hold office from the conclusion of

this Annual General Meeting until the conclusion

of the seventy eighth Annual General Meeting

of the Company to be held in the year 2017

(subject to ratification of the appointment by

the members at every subsequent Annual

General Meeting) and that their remuneration

be and is hereby fixed at `7,50,000 (Rupees

seven lakhs fifty thousand only) per annum plus

reimbursement of service tax, travelling and out

of pocket expenses."

Special Business

4. To appoint Shri Laxminiwas Sharma (DIN:

00010899) as an Independent Director and in

this regard to consider and if thought fit, to

pass, with or without modification(s), the



of Sections 149, 150, 152 read with Schedule

IV and all other applicable provisions of the

Companies Act, 2013 and the Companies

(Appointment and Qualification of Directors)

Rules, 2014 (including any statutory

modification(s) or re-enactment thereof for the

time being in force), and Clause 49 of the Listing

Agreement, Shri Laxminiwas Sharma (DIN:

00010899), Director of the Company who retires

by rotation at this Annual General Meeting and

in respect of whom the Company has received a

notice in writing under Section 160 of the

Companies Act, 2013 from a Member signifying

his intention of proposing the candidature of

Shri Laxminiwas Sharma for the office of

director, be and is hereby appointed as an

Independent Director of the Company to

hold office for five consecutive years from

September 29, 2014 for a term up to the

conclusion of the Eightieth Annual General

Meeting of the Company to be held in the

calendar year 2019."

5. To appoint Shri Pendyala Vaman Rao (DIN:

00069771) as an Independent Director and in












Agreement, Shri Pendyala Vaman Rao (DIN:

00069771), Director of the Company whoseperiod of office is liable to determination byretirement of directors by rotation and in respectof whom the Company has received a notice in

writing under Section 160 of the Companies Act,

2013 from a Member signifying his intention of

proposing the candidature of Shri Pendyala


Vaman Rao for the office of director, be and is

hereby appointed as an Independent Director of

the Company to hold office for five consecutive

years from September 29, 2014 for a term up

to the conclusion of the Eightieth Annual General

Meeting of the Company to be held in the

calendar year 2019."

6. To appoint Shri Vedula Srinivas (DIN: 06947908)

as an Independent Director and in this regard

to consider and if thought fit, to pass, with or

without modification(s), the following resolution

as an Ordinary Resolution:









Agreement, Shri Vedula Srinivas (DIN:

06947908) who was appointed as an Additional

Director by the Board of Directors, pursuant to

the provisions of Section 161(1) of the

Companies Act, 2013 and the Articles of

Association of the Company, and who holds office

up to the date of this Annual General Meeting

and in respect of whom the Company has

received a notice in writing under Section 160

of the Companies Act, 2013, from a Member

signifying his intention of proposing the

candidature of Shri Vedula Srinivas for the office

of Director, be and is hereby appointed as an

Independent Director of the Company to hold

office for five consecutive years from September

29, 2014 for a term up to the conclusion of the

Eightieth Annual General Meeting of the

Company to be held in the calendar year 2019,

whose period of office shall not be liable to retire

by rotation."

7. To appoint Shri Padmanabhan Nagarajan (DIN:

00110344) as Director of the Company and in





of Sections 149,152 read with Schedule IV and

all other applicable provisions of the Companies

Act, 2013 and the Companies (Appointment and

Qualification of Directors) Rules, 2014 (including

any statutory modification(s) or re-enactment

thereof for the time being inforce), and Clause

49 of the Listing Agreement, Shri Padmanabhan

Nagarajan (DIN: 00110344) who was appointed

as an Additional Director by the Board of

Directors, pursuant to the provisions of Section

161(1) of the Companies Act, 2013 and the

Articles of Association of the Company, and who

holds office up to the date of this Annual General

Meeting and in respect of whom the Company

has received a notice in writing under Section

160 of the Companies Act, 2013 from a Member

signifying his intention of proposing the

candidature of Shri Padmanabhan Nagarajan for

the office of director, be and is hereby appointed

as a director of the Company and whose period

of office shall be liable to determination by

retirement of directors by rotation."

8. To re-appoint Shri Rameshwar Lall Lakhotia

(DIN: 00282738) as a Whole-time Director,

designated as Executive Director of the Company

and in this regard to consider and, if thought

fit, to pass, with or without modification(s), the

following resolution as a Special Resolution:


of Sections 196, 197 and 203 read with Schedule

V to the Act and all other applicable provisions

of the Companies Act, 2013 and the Companies

(Appointment and Remuneration of Managerial

personnel) Rules, 2014 (including any statutory


time being in force) and Articles of Association

of the Company and subject to such consent,

approval(s) and permission(s) as may be

necessary in this regard, consent of the Members

of the Company be and is hereby accorded to

the re-appointment of Shri Rameshwar Lall

Lakhotia (DIN: 00282738) as a Whole-time

Director, designated as Executive Director of the

Company, on the following terms and conditions,

including remuneration and perquisites as

approved by the Remuneration Committee:

1. Period: 2 years with effect from July 24,

2014.


2. Remuneration

a. Salary `4,75,000 (Rupees Four lakhs

and seventy five thousand) per month.

b. Performance bonus: 0.20% of profit

before tax.

c. Perquisites: The perquisites shall be as

follows:

i. Housing: rent free furnished

accommodation (an amount

equivalent to 7.5% of his salary

shall be realised from him);

ii. Free electricity and water;

iii. Club fees (subject to maximum of

one club but excluding life

membership and admission fees);

iv. Personal accident insurance, as per

rules of the Company;

v. Leave: 45 days in a year, encashable

at the end of the tenure;

vi. Gratuity (subject to ceiling in the

Payment of Gratuity Act), as per

rules of the Company;

vii. Free use of Company's car with

driver;

viii. Telephone at residence.

The perquisites shall be valued as per

Income Tax Rules wherever applicable

and, in the absence of such Rules, shall

be valued at actual cost.

3. Minimum Remuneration

The remuneration as specified in Sl. No.2

shall continue to be paid to Shri Rameshwar

Lall Lakhotia as minimum remuneration,

notwithstanding the loss or inadequacy of

profits, if any, during the tenure of his office.

4. Duties and responsibilities

a. The Whole-time Director will look after

the entire operations, technical,

managerial and administrative

functions.

b. The Whole-time Director will perform

his duties as such with regard to all

work of the Company and he will

manage and attend to such business and

carry out the orders and directions

given by the Board from time to time

in all respects and conform to and

comply with all such directions and

regulations as may from time to time

be given and made by the Board.

c. The Whole-time Director shall act in

accordance with the Articles of

Association of the Company and shall

abide by the provisions contained in

Section 166 of the Act with regard to

duties of directors.

d. The Whole-time Director shall adhere

to the Company's code of business

conduct and ethics for directors and

management personnel.

5. Other major terms & conditions

a. The office of Whole-time Director may

be terminated by the Company or by

the Whole-time Director by giving the

other one month prior notice in writing.

b. If at any time, the said appointee ceases

to be a director of the Company for any

cause whatsoever, he shall cease to be

whole-time director and vice versa.

c. The Whole-time Director shall not

supplement his earnings by any buying

or selling commission. He shall not also

become interested or otherwise

concerned directly or through his wife

and/or minor children in any selling

or buying agency of the Company.

d. No sitting fee shall be paid to Whole-

time Director for attending the meetings

of Board of Directors or a committee

thereof of the Company.

RESOLVED FURTHER THAT the Board be and is

hereby authorised to do all such acts, deeds,

matters and things as may be deemed necessary

to give effect to the above resolution."

9. To consider and, if thought fit, to pass with or


as a Special Resolution:

"RESOLVED THAT in supersession of the

ordinary resolution adopted through postal ballot


on January 21, 2013 and pursuant to Section

180(1)(c) and any other applicable provisions

of the Companies Act, 2013 and the Companies

(Meetings of Board and its Powers) Rules, 2014

(including any statutory modification(s) or re-

enactment thereof for the time being in force),

the consent of the Company be and is hereby

accorded to the Board of Directors (hereinafter

referred to as 'the Board' which term shall be

deemed to include any Committee thereof) to

borrow money from time to time for the purpose

of the business of the Company, from any one

or more banks, financial institutions etc together

with the money already borrowed by the

Company (apart from temporary loans obtained/

to be obtained from the Company's bankers in

the ordinary course of business) may exceed,

at any time, the aggregate of its paid up share

capital and free reserves upto an amount of

`600 crore (Rupees Six hundred crore only)

apart from temporary loans obtained/to be

obtained from the Company's bankers in the

ordinary course of business.

RESOLVED FURTHER THAT for the purpose of

giving effect to this resolution, the Board be and

is hereby also authorised to do all such acts,

deeds, matters and things as it may in its

absolute discrition deem necessary, proper, or

desirable and to settle any question, difficulty,

doubt that may arise in respect of the

borrowing(s) aforesaid and further to do all such

acts, deeds, matters and things and to excute

all documents and writings as may be necessary,

proper, desirable or expedient to give effect to

this resolution."

10. To adopt new Articles of Association of the

Company containing regulations in conformity

with the Companies Act, 2013 and in this regard

to consider and if thought fit, to pass, with or


as a Special Resolution:


of Section 14 and all other applicable provisions

of the Companies Act, 2013 read with Companies

(Incorporation) Rules, 2014 (including any

statutory modification(s) or re-enactment

thereof, for the time being in force), the draft

regulations contained in the Articles of

Association submitted to this meeting be and

are hereby approved and adopted in substitution,

and to the entire exclusion, of the regulations

contained in the existing Articles of Association

of the Company.

RESOLVED FURTHER THAT the Board of

Directors of the Company be and is hereby

authorised to do all acts and take all such steps

as may be necessary, proper or expedient to

give effect to this resolution."

By order of the BoardFor The Sirpur Paper Mills Limited

Dinesh LataRegistered Office: Company Secretary5-9-22/1/1, 1st FloorAshoka ChambersAdarshnagarHyderabad - 500 063CIN:L21010TG1938PLC000591

August 30, 2014


NOTES

1. A MEMBER ENTITLED TO ATTEND AND VOTE ATTHE MEETING IS ENTITLED TO APPOINT A PROXYTO ATTEND AND VOTE ON A POLL INSTEAD OFHIMSELF/HERSELF AND THE PROXY NEED NOT BEA MEMBER OF THE COMPANY. THE PROXY FORM,IN ORDER TO BE EFFECTIVE, MUST BE DULYCOMPLETED, STAMPED AND LODGED WITH THEREGISTERED OFFICE OF THE COMPANY NOT LESSTHAN FORTY-EIGHT HOURS BEFORE THECOMMENCEMENT OF THE MEETING.

A proxy form is enclosed herewith. Proxiessubmitted on behalf of companies, socities, etcmust be supported by an appropriate resolution/authority, as applicable. A person shall not actas a Proxy for more than 50 members andholding in the aggregate not more than tenpercent of the total voting share capital of theCompany. However, a single person may act asa proxy for a member holding more than tenpercent of the total voting share capital of theCompany provided that such person shall notact as a proxy for any other person.

2. A statement pursuant to Section 102(1) of theCompanies Act, 2013 relating to the SpecialBusiness to be transacted at the Meeting isannexed hereto. Relevant documents referredto in the above notice and statement, are openfor inspection by the members at the RegisteredOffice of the Company between 2.00 p.m. to 4.00p.m. on all working days between Monday andFriday.

3. The Register of Members and the share transferbooks of the Company will remain closed fromSeptember 25, 2014 to September 29, 2014(both days inclusive).

4. Pursuant to Section 205A of the Companies Act,1956, all the unclaimed/unpaid dividends uptothe financial year ended March 31, 1995 havebeen transferred to the general revenue accountof the Central Government. Members who havenot encashed the dividend warrants for theabove period may claim their dividends bysubmitting application in Form-II to theRegistrar of Companies, Andhra Pradesh &Telangana, Kendriya Sadan, Sultan Bazar,Hyderabad 500 095.

Further, pursuant to the provisions of Section205A (5) of the Companies Act, 1956, thedividend for the financial years endedMarch 31, 1996 to 2006 (including interimdividend declared on March 21, 2006), whichremained unclaimed for a period of seven years

was transferred by the Company to the InvestorEducation and Protection Fund established bythe Central Government pursuant to Section205C of the said Act, after giving due notice.Members are requested to note that no claimsshall lie against the Company or the said fundin respect of any amounts which remainunclaimed and unpaid for a period of sevenyears, from the dates that they first becamedue for payment and no payment shall be madein respect of any such claims.

The unclaimed dividend for the financial yearended March 31, 2007 will be transferred bythe Company to the Investor education andprotection fund on or before October 13, 2014.A notice has been sent to the concerned Membersrequesting them to claim the same immediately.Hence, the Members who have not encashed thedividend warrants for the financial year endedMarch 31, 2007 and thereafter are requestedto immediately forward the same to the Companyfor revalidation.

Pursuant to the provisions of Investor Educationand Protection Fund (Uploading of informationregarding unpaid and unclaimed amounts lyingwith Companies) Rules, 2012, the Company hasuploaded the details of unpaid and unclaimedamounts lying with the Company as onSeptember 30, 2013 (date of last AGM) on theCompany's website: www.sirpurpaper.com asalso on the website of the Ministry of CorporateAffairs.

Further, as on March 31, 2014, no unclaimedshare certificates are lying with the Companyin terms of Clause 5A(I) and Clause 5A(II) ofthe Listing Agreement.

5. Any change in address of the Members mayplease be notified to the registrars and sharetransfer agents of the Company quoting theirregistered folio.

6. The Securities and Exchange Board of India(SEBI) has mandated the submission of incometax Permanent Account Number (PAN) by everyparticipant in the securities market. Membersholding shares in electronic form are therefore,requested to submit the PAN details to theirdepository participants with whom they aremaintaining their demat accounts. Membersholding shares in physical form can submit theirPAN details to the Company/Registrar and ShareTransfer Agent, M/s. Venture Capital andCorporate Investments Private Limited.


7. In order to send all communications includingNotices, Annual Reports and othercommunications through Email, we requestMembers to send a confirmation to the Registrars(RTA) mentioning your name, DP/Client ID orFolio number and Email ID for communicationand also inform any changes in the Email address.

Further, Members are requested to visit theCompany's website, i.e. www.sirpurpaper.com forviewing the quarterly, half-yearly and annualfinancial results and for more information onthe Company.

8. Members holding shares in physical form mayplease note that the Securities and ExchangeBoard of India has made trading in the sharesof the Company compulsorily in dematerialisedform for all investors. Hence, Members arerequested to open a beneficiary owner accountwith a depository participant, if not done so far,and may get their physical sharesdematerialised.

9. Members holding shares in physical form, whoare individuals, holding shares on their ownbehalf, singly or jointly can make nomination.Nomination form is available on request.Members holding shares in dematerialised formmay please contact their depository participantsfor recording the nomination.

10. Details under Clause 49 of the Listing Agreementwith the stock exchanges in respect of Directorsseeking appointment/re-appointment at theAnnual General Meeting, forms an integral partof the Notice. The particulars of the aforesaiddirectors are also annexed.

11. Members desiring any information as regardsthe accounts for the year 2013-14 are requestedto send their queries in writing to the Company'sregistered office not less than 72 hours beforethe commencement of the AGM, for effectiveparticipation in the proceedings.

12. As an austerity measure, copies of the AnnualReport will not be distributed at the AnnualGeneral Meeting. Members are requested to bringtheir copies to the Meeting.

13. Members/Proxies are requested to kindly takenote of the following:

a. Attendance slip, as sent herewith, isrequired to be brought at the venue dulyfilled in and signed, for attending themeeting.

b. Folio No./DP & Client ID No. may please bequoted in all correspondence with the

Company and/or the Registrar and ShareTransfer Agent.

14. Green Initiative

Electronic copy of the Notice of the 75th AnnualGeneral Meeting of the Company inter aliaindicating the process and manner of E-votingalong with Attendance Slip and Proxy Form isbeing sent to all the members whose email IDsare registered with the Company/DepositoryParticipant(s) for communication purposesunless any Member has requested for a hardcopy of the same. For Members who have notregistered their Email address, physical copiesof the Notice of the 75th Annual General Meetingof the Company inter alia indicating the processand manner of E-voting along with AttendanceSlip and Proxy Form is being sent in thepermitted mode.

Members may also note that the Notice of the75th Annual General Meeting and the AnnualReport for 2013-14 will also be available on theCompany's website www.sirpurpaper.com fortheir download. The physical copies of theaforesaid documents will also be available at theCompany's Registered Office in Hyderabad forinspection between 2:00 p.m. to 4:00 p.m. onall working days from Monday to Friday. Evenafter registering for E-communication, Membersare entitled to receive such communication inphysical form, upon making a request for thesame, by post, free of cost. For anycommunication, the Members may also sendrequests to the Company or to its Registrar andShare Transfer Agent, at the following EmailIDs:

[email protected]

[email protected]

15. Electronic voting (Voting through electronicmeans)

In compliance with provisions of Section 108 ofthe Companies Act, 2013 and Rule 20 of theCompanies (Management and Administration)Rules, 2014 read with Clause 35B of the ListingAgreement, the Company is pleased to provideto the Members the facility to exercise theirright to vote on all resolutions set forth in thisNotice, convening the 75th Annual GeneralMeeting (AGM) by electronic means and thebusiness will be transacted through E-votingservice provided by National SecuritiesDepository Limited (NSDL). The detailedinstructions for E-voting are given as a separateattachment to this Notice (at pages 13 & 14).


Item 4 and 5 of the Notice:

Shri Laxminiwas Sharma and Shri Pendyala VamanRao are the existing Independent Directors of theCompany and their period of office is liable todetermination by retirement of directors by rotation.With the enactment of the Companies Act, 2013('Act') it is now incumbent upon every listedCompany to appoint 'Independent Directors' asdefined in Section 149 of the Act, which has beennotified with effect from April 1, 2014, who are notliable to retire by rotation and shall hold office for aterm up to five consecutive years and he shall notbe included in the total number of Directorsconsidered for retirement by rotation. The Securitiesand Exchange Board of India (SEBI) has also revisedclause 49 of the Listing Agreement inter aliastipulating similar conditions for the appointmentof Independent Directors by a listed company.

Accordingly, at the ensuing Annual General Meetingof the Company, it is proposed to appoint ShriLaxminiwas Sharma and Shri P. Vaman Rao, asIndependent Directors under Section 149 of the Actand revised Clause 49 of the Listing Agreement tohold office for five consecutive years fromSeptember 29, 2014 for a term up to the conclusionof the Eightieth Annual General Meeting of theCompany to be held in the calendar year 2019, whoseoffice shall not be liable to retire by rotation.

The Company has received declarations from ShriLaxminiwas Sharma and Shri P. Vaman Rao thatthey meet with criteria of Independence as prescribedboth under sub-section (6) of Section 149 of the Actand under Clause 49 of the Listing Agreement.

Brief resume of Shri Laxminiwas Sharma and ShriP. Vaman Rao, nature of their expertise in specificfunctional areas and names of Companies in whichthey hold directorships and memberships/chairmanships of board committees, shareholding etc,as stipulated under Clause 49 of the Listing Agreementwith the stock exchanges, are provided in theannexure to this notice and in the CorporateGovernance Report forming part of the Annual Report.

The Company has received notices in writing fromMembers, along with the deposit of requisite amount,under Section 160 of the Act, proposing thecandidature of each of Shri Laxminiwas Sharma andShri P. Vaman Rao for the office of Directors of theCompany.

EXPLANATORY STATEMENT(Pursuant to Section 102(1) of the Companies Act, 2013)

Shri Laxminiwas Sharma and Shri P. Vaman Raoare not disqualified from being appointed as Directorsin terms of Section 164 of the Act.

The Board of Directors of your Company, afterreviewing the provisions of the Act, are of the opinionthat Shri Laxminiwas Sharma and Shri P. VamanRao fulfil the conditions specified in the Act and theRules made thereunder to be eligible to be appointedas Independent Director pursuant to the provisionsof Section 149 of the Act and Clause 49 of the ListingAgreement. The Board of Directors of your Companyis also of the opinion that Shri Laxminiwas Sharmaand Shri P. Vaman Rao are independent of themanagement of the Company.

The Board considers that their continued associationwould be of immense benefit to the Company and itis desirable to continue to avail services of ShriLaxminiwas Sharma and Shri P. Vaman Rao asIndependent Directors. Accordingly, the Boardrecommends the Resolutions in relation toappointment as Independent Directors pursuant tothe provisions of Section 149 read with Schedule IVof the Act and Clause 49 of the Listing Agreementfor approval by the Members of the Company.

Copy of the draft letters for respective appointmentsof Shri Laxminiwas Sharma and Shri P. Vaman Raoas Independent Directors setting out the terms andconditions are available for inspection by membersat the Registered Office of the Company.

This statement may also be regarded as a disclosureunder Clause 49 of the Listing Agreement with thestock exchanges.

Shri Laxminiwas Sharma and Shri P. Vaman Raoare interested in the Resolutions set out respectivelyat Items 4 and 5 of the Notice with regard to theirrespective appointments.

The relatives of Shri Laxminiwas Sharma and ShriP. Vaman Rao may be deemed to be interested in theResolutions set out respectively at Items 4 and 5 ofthe Notice, to the extent of their shareholdinginterest, if any, in the Company.

Save and except the above, none of the otherDirectors/key managerial personnel of the Company/their relatives is, in any way concerned or interested,financially or otherwise, in these resolutions.

The Board recommends the Ordinary Resolutions setout at Items 4 and 5 of the Notice for approval bythe Members.


Item 6 of the Notice:

The Board of Directors of the Company appointedShri Vedula Srinivas as an Additional Director ofthe Company with effect from August 11, 2014pursuant to the provisions of Section 161(1) of theAct and the Articles of Association of the Company.In terms of the provisions of Section 161(1) of theAct, he holds office up to the date of the ensuingAnnual General Meeting.

Shri Vedula Srinivas is not disqualified from beingappointed as a Director in terms of Section 164 ofthe Act and has given his consent to act as a Director.

Section 149 of the Act inter alia stipulates the criteriaof independence should a company propose to appointan independent director on its Board. As per thesaid Section, an independent director can hold officefor a term up to five consecutive years on the Boardof a company and he shall not be included in thetotal number of directors for retirement by rotation.

Accordingly, Shri Vedula Srinivas being eligible isproposed to be appointed as an Independent Directorfor a term of five consecutive years up to theconclusion of Eightieth Annual General Meeting ofthe Company to be held in the calendar year 2019.

The Company has received a declaration from ShriVedula Srinivas that he meets with the criteria ofindependence as prescribed both under sub-section(6) of Section 149 of the Act and under Clause 49 ofthe Listing Agreement.

Brief resume of Shri Vedula Srinivas, nature of hisexperience in specific functional areas and namesof companies in which he holds directorships andmemberships/chairmanships of board committees,shareholding and relationships between directorsinter-se as stipulated under Clause 49 of the ListingAgreement with the stock exchanges is annexed tothis notice.

The Company has received, along with requisitedeposit, a notice under Section 160 of the Act inwriting from a Member proposing the candidatureof Shri Vedula Srinivas for the office of Director ofthe Company.

In the opinion of the Board, Shri Vedula Srinivasfulfils the conditions for his appointment as anIndependent Director as specified in the Act and rulesmade thereunder and the Listing Agreement, for hisappointment as an Independent Director of theCompany and he is independent of the management.

Copy of the draft letter for appointment of Shri

Vedula Srinivas as an Independent Director settingout the terms and conditions is available forinspection by Members at the Registered Office ofthe Company.

The Board considers that keeping in view hisexpertise and knowledge, it would be of immensebenefit to the Company that Shri Vedula Srinivas isappointed as an Independent Director of theCompany. Accordingly, the Board recommends theResolution in relation to appointment of Shri VedulaSrinivas as an Independent Director of the Company,for approval by the Members of the Company.

Save and except Shri Vedula Srinivas, none of theother Directors/key managerial personnel of theCompany and their relatives are, in any way,concerned or interested, financially or otherwise, inthe Resolution set out at Item 6 of the Notice.

The statement may also be regarded as a disclosureunder Clause 49 of the Listing Agreement with thestock exchanges.


The Board of Directors of the Company appointedShri Padmanabhan Nagarajan as an AdditionalDirector of the Company with effect fromAugust 11, 2014 pursuant to the provisions of Section161(1) of the Act and the Articles of Association ofthe Company. In terms of the provisions of Section161(1) of the Act, he holds office up to the date ofthe ensuing Annual General Meeting.

He is not disqualified from being appointed as aDirector in terms of Section 164 of the Act and hasgiven his consent to act as a Director.

It is proposed to appoint Shri PadmanabhanNagarajan as Director of the Company, whose periodof office shall be liable to determination by retirementof directors by rotation.

The Company has received, along with requisitedeposit, a notice under Section 160 of the Act inwriting from a Member proposing the candidatureof Shri Padmanabhan Nagarajan for the office ofDirector of the Company.

Brief resume of Shri Padmanabhan Nagarajan,nature of his experience in specific functional areasand names of companies in which he holdsdirectorships and memberships/chairmanships ofBoard Committees, shareholding and relationshipsbetween directors inter-se as stipulated under Clause49 of the Listing Agreement with the stockexchanges, is annexed to this notice.


The Board of Directors of your Company, afterreviewing the provisions of the Act, are of the opinionthat Shri Padmanabhan Nagarajan fulfils theconditions specified in the Act and the Rules madethereunder to be eligible to be appointed as Directorof the Company.

The Board considers that keeping in view hisexpertise and knowledge, it would be of immensebenefit to the Company that Shri PadmanabhanNagarajan is appointed as a Director of the Company.Accordingly, the Board recommends the Resolutionin relation to appointment of Shri PadmanabhanNagarajan as a Director of the Company, whoseperiod of office shall be liable to determination byretirement of directors by rotation, for the approvalby the Members of the Company.

Save and except Shri Padmanabhan Nagarajan, noneof the other Directors/key managerial personnel ofthe Company and their relatives are, in any way,concerned or interested, financially or otherwise, inthe Resolution set out at Item 7 of the Notice.

The statement may also be regarded as a disclosureunder Clause 49 of the Listing Agreement with thestock exchanges.


Shri Rameshwar Lall Lakhotia is a B. Tech. (ChemicalEngg.) and aged 69 years. He will be attaining theage of 70 years in July 2015. He has 46 years ofrich experience in chemical and paper industriescoupled with administrative capabilities in variousmanagerial and executive capacities includingproduction, sales, finance, projects, governmentliaisoning, industrial relations etc. The Board ofDirectors re-appointed Shri Rameshwar Lall Lakhotiaas Whole-time Director, designated as ExecutiveDirector of the Company, with effect from July 24,2014 for a further period of two years upto July23, 2016, on the remuneration and the terms andconditions as stated in the Resolution.

The remuneration of Executive Director as set outin the special resolution was approved by theremuneration committee and the Board of Directorsat their meetings held on May 29, 2014.

Shri Rameshwar Lall Lakhotia has given anundertaking to the Company to the effect that solong as he functions as Whole-time Director of theCompany, he shall not become interested or otherwiseconcerned directly or indirectly or through his wifeand/or his minor children in any buying or sellingagency of the Company.

The Resolution is proposed for obtaining yourapproval to the appointment and the remunerationof Shri Rameshwar Lall Lakhotia as ExecutiveDirector. The appointment will be beneficial to the

Company and accordingly the Board recommends

the passing of the Resolution as a Special Resolution.

Shri Rameshwar Lall Lakhotia satisfies all the

conditions set out in Part I of Schedule V to the Act

as also conditions set out under sub-section (3) of

Section 196 of the Act for being eligible for

re-appointment. The Resolution is proposed as a

Special Resolution, both for the purposes of Part II

of Schedule V and proviso to sub-section 3(a) of

Section 196 of the Act. He is not disqualified from

being appointed as Director in terms of Section 164

of the Act. Requisite confirmations have been

obtained.

None of the Directors/key managerial personnel of

the Company/their relatives except Shri Rameshwar

Lall Lakhotia is, in any way concerned or interested,

financially or otherwise, in the Special Resolution

set out at Item 8 of the Notice.

The above may be treated as a written memorandum

setting out of the terms of re-appointment of Shri

Rameshwar Lall Lakhotia under Section 190 of the

Companies Act, 2013.

In terms of Schedule V of the Companies Act, 2013

a statement giving required information is appended

to this Notice.


Borrowing powers

In terms of Section 293(1)(d) of the Companies Act,

1956, the Members had passed requisite resolution,

by way of Ordinary Resolution on January 21, 2013

through Postal Ballot process. The Board of

Directors was duly delegated powers for making

borrowings upto an aggregate outstanding amount

of `600 crore.

The Central Government has since enacted the

Companies Act, 2013 in place of the Companies Act,

1956 and the provisions of new law are being

effectuated in a phased manner. In terms of Section

180 of the Companies Act, 2013, the authorisation

by Members for the aforesaid purposes shall require

to be given by way of Special Resolution. Ministry

of Corporate Affairs, by General Circular No.04/204,

dated March 25, 2014 has clarified that the

resolutions passed under Section 293 of the


Companies Act, 1956 prior to September 12, 2013

with reference to borrowings will be regarded as

sufficient compliance of the requirements of Section180 of the Companies Act, 2013 for a period of oneyear from the said notification date.

It has, thus, become necessary for the Company torevalidate the sanction already accorded by passinga fresh resolution by way of a Special Resolution.Having regard to the current business plans of theCompany, the existing limit is considered sufficientand no enhancement of limit has been sought at thecurrent juncture.

None of the Directors/key managerial personnel ofthe Company/their relatives is, in any way, concernedor interested, financially or otherwise, in the SpecialResolution set out at Item 9 of the Notice.


The existing Articles of Association (AoA) are basedon the Companies Act, 1956 and several regulationsin the existing AoA contain references to specificsections of the Companies Act, 1956 and someregulations in the existing AoA are no longer inconformity with the Companies Act, 2013 (Act).

The Act is now largely in force. On September 12,2013, the Ministry of Corporate Affairs (MCA) hadnotified 98 sections for implementation.Subsequently, on March 26, 2014, MCA notified mostof the remaining sections (barring those provisionswhich require sanction/confirmation of the NationalCompany Law Tribunal ('Tribunal') such as variationof rights of holders of different classes of shares(Section 48), reduction of share capital (Section 66),compromises, arrangements and amalgamations(Chapter XV), prevention of oppression andmismanagement (Chapter XVI), revival andrehabilitation of sick companies (Chapter XIX),winding up (Chapter XX) and certain otherprovisions including, inter alia, relating to InvestorEducation and Protection Fund (Section 125) andvaluation by registered valuers (Section 247).However, substantive sections of the Act which dealwith the general working of companies stand notified.

With the coming into force of the Act, severalregulations of the existing AoA of the Companyrequire alteration or deletions in several articles.Given this position, it is considered expedient to whollyreplace the existing AoA by a new set of Articles.

The new AoA to be substituted in place of the existingAoA are based on Table 'F' of the Act which sets out

the model articles of association for a companylimited by shares. Members' attention is invited tocertain salient provisions in the new draft AoA ofthe Company viz:

a. Company's lien now extends also to bonusesdeclared from time to time in respect of sharesover which lien exists;

b. The nominee(s) of a deceased sole member arerecognised as having title to the deceased'sinterest in the shares;

c. New provisions regarding application of fundsfrom reserve accounts, when amounts in reserveaccounts are to be capitalised;

d. New provisions relating to appointment of chiefexecutive officer and chief financial officer, inaddition to manager and company secretary;

e. Existing articles have been streamlined andaligned with the Act;

f. The statutory provisions of the Act which permita company to do some acts 'if so authorised byits articles' or provisions which require acompany to do acts in a prescribed manner'unless the articles otherwise provide' have beenspecifically included; and

g. Provisions of the existing AoA which are alreadypart of statute in the Act have not beenreproduced in the new draft AoA as they wouldonly lead to duplication - their non-inclusionmakes the new AoA crisp, concise and clear andaids ease of reading and understanding.

None of the Directors/key managerial personnel ofthe Company/their relatives is, in any way concernedor interested, financially or otherwise, in the SpecialResolution set out at Item 10 of the Notice.

The Board recommends the Special Resolution setout at Item 10 of the Notice for approval by theMembers.

By order of the BoardFor The Sirpur Paper Mills Limited

Dinesh LataRegistered Office: Company Secretary5-9-22/1/1, 1st FloorAshoka ChambersAdarshnagarHyderabad - 500 063CIN: L21010TG1938PLC000591

August 30, 2014.


INSTRUCTIONS FOR E-VOTING

E-Voting Process:

I. Pursuant to provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies(Management and Administration) Rules, 2014, read with Clause 35 B of the Listing Agreement, theCompany is pleased to offer E-voting facility to the Members to cast their votes electronically on allresolutions set forth in the Notice convening the 75th Annual General Meeting to be held on Monday, the29th September, 2014 at 12.30 p.m. The Company has engaged the services of National SecuritiesDepository Limited (NSDL) to provide the E-voting facility.

The E-voting facility is available at the link https://www.evoting.nsdl.com

The E-voting Event Number and period of E-voting are set out below:

EVEN (E-VOTING-EVENT NUMBER) COMMENCEMENT OF E-VOTING END OF E-VOTING

The instructions for E-voting are as under:

A. In case a Member receives an Email fromNSDL [for members whose email IDs areregistered with the Company/DepositoryParticipant(s)]:

i. Open email and open PDF file viz;Sirpurpaper e-Voting.pdf with yourClient ID or Folio No. as password. Thesaid PDF file contains your user ID andpassword/PIN for E-voting. Please notethat the password is an initial password.

ii. Launch internet browser by typing thefollowing URL: https://www.evoting.nsdl.com/

iii. Click on Shareholder - Login

iv. Type user ID and password as initialpassword/PIN noted in step (i) above.Click Login.

v. Password change menu appears. Changethe password/PIN with new passwordof your choice with minimum 8 digits/characters or combination thereof. Notenew password. It is stronglyrecommended not to share yourpassword with any other person andtake utmost care to keep your passwordconfidential.

vi. Home page of E-voting opens. Click one-voting: Active Voting Cycles.

vii. Select 'EVEN' of The Sirpur Paper MillsLimited.

viii. Now you are ready for E-voting as CastVote page opens.

ix. Cast your vote by selecting appropriateoption and click on 'submit' and also'confirm' when prompted.

x. Upon confirmation, the message 'Votecast successfully' will be displayed.

xi. Once you have voted on the resolution,you will not be allowed to modify yourvote.

xii. Institutional Members (i.e. other thanindividuals, HUF, NRI etc.) are requiredto send scanned copy (PDF/JPGFormat) of the relevant boardresolution/authority letter etc. togetherwith attested specimen signature of theduly authorised signatory(ies) who areauthorised to vote, to the Scrutinizerthrough Email [email protected] with acopy marked to [email protected]

100804 17th September, 2014at 9.00 a.m.

19th September, 2014at 6.00 p.m.


B. In case a Member receives physical copy ofthe Notice of AGM [for members whose EmailIDs are not registered with the Company/Depository Participant(s) or requestingphysical copy]:

i. Initial password is provided as below/at the bottom of the Attendance Slipfor the AGM: EVEN (E-Voting EventNumber) USER ID PASSWORD/PIN

ii. Please follow all steps [from Sl.No.(ii)to (xii)] as mentioned above, to castyour vote.

II. In case of any queries, you may refer theFrequently Asked Questions (FAQs) for Membersand e-voting user manual for Members availableat the Downloads Section of https://www.evoting.nsdl.com or contact NSDL at thefollowing telephone number: +91 22 2499 4600.

III. If you are already registered with NSDL forE-voting, then you can use your existing userID and password/PIN for casting your vote.

IV. You can also update your mobile number andEmail ID in the user profile details of the foliowhich may be used for sending futurecommunication(s).

V. The E-voting period commences on September17, 2014 (9.00 a.m.) and ends on September19, 2014 (6:00 p.m.). During this period,Members of the Company, holding shares eitherin physical form or in dematerialised form, as

on the cut-off date (record date) of August 22,2014, may cast their vote electronically. The E-voting module shall be disabled by NSDL forvoting thereafter. Once the vote on a resolutionis cast by the Member, the Member shall not beallowed to change it subsequently.

VI. The voting rights of Members shall be inproportion to their shares of the paid up equityshare capital of the Company as on the cut-offdate (record date) of August 22, 2014.

VII. Shri A. J. Sharma of M/s. A.J. Sharma &Associates, Practicing Company Secretary(Membership No. CP-2176, FCS-2120) has beenappointed as the Scrutinizer to scrutinise the e-voting process in a fair and transparent manner.

VIII. The Scrutiniser shall within a period notexceeding three working days from theconclusion of the E-voting period unblock thevotes in the presence of at least two witnessesnot in the empoyment of the Company and makea Scrutinizer's Report of the votes cast in favouror against, if any, forthwith to the Chairman ofthe Company.

IX. The result shall be declared on or after theAnnual General Meeting of the Company. Theresults declared along with Scrutinizer's Reportshall be placed on the Company's websitewww.sirpurpaper.com and the website of NSDLwithin two days of passing the resolution at theAnnual General Meeting of the Company andcommunicated to the stock exchanges.


Statement as required in terms of Schedule V of the Companies Act, 2013 annexed to the Notice callingAnnual General Meeting for approval of remuneration and terms and conditions of the re-appointment ofShri Rameshwar Lall Lakhotia, Executive Director (Please refer Special Resolution No.8 of the Noticedated August 30, 2014)

I. General information

1. Nature of industry Manufacture of pulp, paper and paper board andgeneration of power.

2. Date or expected date of commencement Not applicable.of commercial production

3. In case of new companies, expected date Not applicable.of commencement of activities as perproject approved by financial institutionsappearing in the prospectus

4. Financial performance based on The key performance indicators of the Company duringgiven indicators the previous three years are given under:

` Lakhs

Particulars 2011-12 2012-13 2013-14

Sales & other income 40023 36520 43059

Operating profit (EBIDT) 4979 (2854) (1392)

Profit before depreciation & tax 792 (7342) (6214)

Net profit/(loss) before tax (2207) (10269) (9098)

Note: For further details please refer Annual Report and Financial Highlights.

5. Foreign investments or collaborations, Amba Investments Private Limited, a foreign company,if any invested in 37,90,067 ordinary shares of `10 each of

the Company, constituting 22.31% of the paid up capitalof the Company and there is no foreign collaboration.

II. Information about the appointee

1. Background details

i. Age 69 years

ii. Academic qualifications B. Tech. (Chemical Engg.)

iii. Experience Shri Rameshwar Lall Lakhotia has 46 years of richexperience in chemical and paper industries coupledwith administrative capabilities in various managerialand executive capacities including production, sales,finance, projects, government liasioning and industrialrelations etc.

iv. Particulars of previous employment Appointed as Whole-time Director, designated asas whole-time director Executive Director from July 24, 2010 to July 23,

2014 for 2 terms of two years each.

v. Date of approval of last He was re-appointed as Whole-time Director, designatedre-appointment as Executive Director, by the Members of the Company

at the annual general meeting held on September 28,2012 for a period of two years with effect fromJuly 24, 2012.

vi. Approval for increase in Not Applicableremuneration, if any


2. Past remuneration:

For the financial year 2013-14

i. Salary, allowances and perquisites Salary: `4,75,000 per month. Rent free furnishedaccommodation (an amount equivalent to 7.5% of hissalary shall be realised from him); Free electricity andwater; Club fees (subject to maximum of one club butexcluding life membership and admission fees);Personal accident insurance as per rules of theCompany; Free use of Company's car with driver;telephone at residence.

ii. Remuneration payable in case of Same as above.inadequacy of profits in any year

3. Recognition and awards During the year 2013, the Company in appreciation ofits achievements in energy conservation in the paper& pulp sector, has been awarded second timeconsecutively the First Prize by Ministry of Power,Government of India. This prestigious National Awardhas been received from the Hon'ble President of India,Shri Pranab Mukherjee, in the presence of Hon'bleMinister for Power, Government of India and otherdistinguished guests on December 16, 2013.

The Company has been declared consecutively thewinner of the 'First Prize' for Energy Conservation inSmall and Medium Scale Industry Category for2012-13 by New & Renewable Energy DevelopmentCorporation of Andhra Pradesh Limited, and the awardwas received at a function held on December 20, 2013at Hyderabad.

4. Job profile and his suitability The Whole-time Director will look after entireoperations, technical, managerial and administrativefunctions.

The Whole-time Director will perform his duties as suchwith regard to all work of the Company and he willmanage and attend to such business and carry out theorders and directions given by the Board from time totime in all respects and conform to and comply withall such directions and regulations as may from timeto time be given and made by the Board.

Shri Rameshwar Lall Lakhotia has 46 years of richexperience in chemical and paper industries coupledwith administrative capabilities in various managerialand executive capacities including production, sales,finance, projects, government liasioning and industrialrelations etc.


5. Remuneration proposed a. Salary: ̀ 4,75,000 (Rupees Four lakhs and seventyfive thousand) per month.

b. Performance bonus: 0.20% of profit before tax.

c. Perquisites: The perquisites shall be as follows:

i. Housing: Rent free furnished accommodation(an amount equivalent to 7.5% of his salaryshall be realised from him);

ii. Free electricity and water;

iii. Club fees (subject to maximum of one club butexcluding life membership and admission fees);

iv. Personal accident insurance as per rules ofthe Company;

v. Leave: 45 days in a year, encashable at theend of the tenure;

vi. Gratuity (subject to ceiling in Payment ofGratuity Act), as per rules of the Company;

vii. Free use of Company's car with driver;

viii.Telephone at residence.

Perquisites shall be valued as per income tax rules,wherever applicable and, in the absence of suchrules, shall be valued at actual cost.

d. Minimum remuneration

In the event of loss or inadequacy of profit, thewhole-time director shall be paid and entitled toremuneration - salary, performance bonus andperquisites as minimum remuneration.

6. Comparative remuneration profile with The details of remuneration available as per publishedrespect to industry, size of the Company, accounts of a few companies for the year endedprofile of the position and person March 31, 2014 are given below and their involvement,

contribution in the growth of the Company may not besame and comparable:

a. Ballarpur Industries Limited: Whole-time director`209.45 Lakhs (for the year ended June 30, 2013);

b. West Coast Paper Mills Limited: Executive director`194.95 Lakhs;

c. Seshasayee Paper and Boards Limited: Whole-timedirector `48.78 Lakhs;

d. J.K. Paper Mills Limited: Whole-time director`168.42 Lakhs (for the year 2012-13).

7. Pecuniary relationship directly or Shri Rameshwar Lall Lakhotia does not hold any sharesindirectly with the Company, or in the Company and except employment with therelationship with the managerial Company does not have any other pecuniary relationshippersonnel, if any directly or indirectly. He is not related to any other

director or key managerial personnel of the Company.


III. Other information

1. Reasons of loss or inadequate profits The severe power cut by the state grid continued duringthe year till July 2013 resulting in forced shut downof one paper machine leading to lower production. Therise in cost of major inputs continued during the yearand affected working of the company. The availabilityof prime raw material i.e. wood declined further duringthe year resulting in increase in price by 42% over &above to increase by 40% over last year. Coal pricealso increased by 12% during the year besides steepincrease in prices of major chemicals ranging from10% to 70%.

2. Steps taken or proposed to be taken Efforts are already put in for improving the productivity

for improvement further; minimizing the input consumption in terms of

per ton of paper; developing new price remunerative

paper varieties; and controling the input costs and

wastages.

3. Expected increase in productivity Barring unforeseen circumstances, the capacity

and profits. utilisation is expected to improve by 10 to 12%, with

corresponding improvement in profitability.

IV. Disclosures

1. Remuneration package of the managerial The required disclosures have been made in thepersonnel and also of all the Directors Corporate Governance Section in the Annual Report.

2. Details of fixed component and Performance bonus not exceeding 0.20% ofperformance linked incentives along profit before tax.with the performance criteria

3. Service contracts, notice period, The re-appointment is contractual which can beseverance fees determined by one month notice by either party.

Except above, no other severance fees is payable.

4. Stock option details, if any, and Not issued so far.whether the same has been issued at adiscount as well as the period over whichaccrued and over which exercisable


INF

OR

MA

TIO

N R

EQ

UIR

ED

TO

BE

FU

RN

ISH

ED

UN

DE

R C

LA

USE

49

OF

TH

E L

IST

ING

AG

RE

EM

EN

T I

N R

ESP

EC

T O

FD

IRE

CT

OR

S B

EIN

G A

PP

OIN

TE

D/

RE

-AP

PO

INT

ED

Na

me

Date

of

bir

th

Appoi

nte

d o

n

Qualifica

tions

Exper

tise

in

spec

ific

funct

ional

are

as

Dir

ecto

rship

sin

oth

erco

mpanie

s

Mem

ber

ship

s/Chair

man o

fco

mm

itte

esacr

oss

public

com

panie

s

Sh

ri R

an

jan

Ku

ma

rP

odd

ar

Augu

st 1

2, 1949

Sep

tem

ber

20,

1975

B.A

. (E

conom

ics)

(Hons.

)

Indust

rialist

Ara

vali S

ecuri

ties

and F

inance

Lim

ited

;

Bou

tique

Hot

els

India

Pri

vate

Lim

ited

.

Au

dit

Com

mit

tee

Ara

vali S

ecuri

ties

&Fin

ance

Lim

ited

(Mem

ber

)

Sta

keh

old

ers'

Rel

ati

on

ship

Co

mm

itte

e

Ara

vali S

ecuri

ties

&Fin

ance

Lim

ited

(Mem

ber

)

Sh

ri L

ax

min

iwa

sS

ha

rma

Feb

ruary

17, 1947

January

31, 2000

F.C.A

.

For

mer

Pre

siden

t of

FAPCCI

and a

sen

ior

Chart

ered

Acc

ounta

nt

and T

ax C

onsu

ltant

B. N. Rath

i Sec

uri

ties

Lim

ited

;

Bapuji E

state

s Pri

vate

Lim

ited

;

Bra

hm

shah

Co-

oper

ative

Hea

lth

Ser

vic

es P

rivate

Lim

ited

.

Au

dit

Com

mit

tee

B. N. Rath

i Sec

uri

ties

Lim

ited

(Chair

man);

The

Sir

pur

Paper

Mills

Lim

ited

(M

ember

)

Nom

ina

tion

an

dR

emu

ner

ati

on

Co

mm

itte

e

The

Sir

pur

Paper

Mills

Lim

ited

(M

ember

)

Sta

keh

old

ers'

Rel

ati

on

ship

Co

mm

itte

e

The

Sir

pur

Paper

Mills

Lim

ited

(Chair

man)

Sh

ri P

. Va

ma

n R

ao

June

12, 1928

Nov

ember

10, 2000

B. A

.

Public

rela

tion

s and

journ

alism

, ge

ner

al

adm

inis

tration

and

liais

on

Hyder

abad I

ndust

ries

Lim

ited

;

Hyder

abad A

genci

esPri

vate

Lim

ited

.

Au

dit

Com

mit

tee

HIL

Lim

ited

(Chair

man)

The

Sir

pur

Paper

Mills

Lim

ited

(Chair

man)

Nom

ina

tion

an

dR

emu

ner

ati

on

Co

mm

itte

e

HIL

Lim

ited

(M

ember

)

The

Sir

pur

Paper

Mills

Lim

ited

(Chair

man)

Sta

keh

old

ers'

Rel

ati

on

ship

Co

mm

itte

e

HIL

Lim

ited

(Chair

man)

The

Sir

pur

Paper

Mills

Lim

ited

(M

ember

)

Sh

ri V

edu

la S

rin

iva

s

Marc

h 3

0, 1959

Augu

st 1

1, 2014

B. Com

., L

LB, A

.C.A

.

Pra

ctic

ing

Advo

cate

in

AP H

igh C

ourt

sin

ce1982 in c

orpor

ate

,ge

ner

al and o

ther

law

s.

Nil

Nil

Sh

ri P

ad

ma

na

bh

an

Na

ga

raja

n

June

12, 1951

Augu

st 1

1, 2014

B. Com

, BGL, A

.C.A

.

Has

nea

rly f

our

dec

ades

of

pos

tqualifica

tion

wor

k e

xper

ience

in

are

as

like

trea

sury

, fo

rex, w

orkin

gca

pital

manage

men

t, c

orpor

ate

taxation

, co

rpor

ate

res

truct

uri

ng,

pro

ject

evalu

ation

etc

. Aw

ard

ed t

he

'CFO o

f th

e yea

r' in t

he

cate

gory

of

'Dea

l of

the

Yea

r' inst

itute

d b

y I

MA

India

, in

2005. Pre

sently a

mem

ber

of F

ICCI'

s Bankin

g &

Fin

anci

al

Inst

itution

s (F

&I)

Com

mitte

e.

Jasp

er I

ndust

ries

Pri

vate

Lim

ited

-Fin

ance

Dir

ecto

r; J

asp

er A

uto

Ser

vic

es P

rivate

Lim

ited

; Jasp

erAuto

mob

iles

Pri

vate

Lim

ited

;Bhuba

nes

war

Pow

er P

rivate

Lim

ited

;Jasp

er A

uto

mob

iles

Tel

angana

Pri

vate

Lim

ited

; Cor

omandel

Engi

nee

ring

Com

pany L

imited

.

Au

dit

Com

mit

tee

Cor

omandel

Engi

nee

ring

Com

pany

Lim

ited

(M

ember

)

Sh

ri R

am

esh

wa

r L

all

La

kh

oti

a

July

26, 1945

July

24, 2010

B.T

ech

(Chem

ical

Engg

.)

Has

46 y

ears

of

rich

exper

ience

in

chem

ical

and p

aper

indust

ries

cou

ple

dw

ith a

dm

inis

trative

capabilitie

s in

vari

ous

manage

rial

and

exec

utive

capaci

ties

incl

udin

g pro

duct

ion,

sale

s, f

inance

,pro

ject

s, g

over

nm

ent

liais

onin

g, i

ndust

rial

rela

tion

s et

c.

Nil

Au

dit

Com

mit

tee

The

Sir

pur

Paper

Mills

Ltd

(M

ember

)

Sta

keh

old

ers'

Rel

ati

on

ship

Co

mm

itte

e

The

Sir

pur

Paper

Mills

Ltd

(M

ember

)


Directors’ ReportDear Members,

Your Directors have pleasure in presenting theirAnnual Report and audited accounts of the Companywith Auditors' Report for the financial year endedMarch 31, 2014.

The financial performance of the Company for theyear under review is summarized in the table given

below:

` Lakhs

Working results 2013-14 2012-13

Production MT 89,256 83,085

Sales MT 86,323 83,789

Net operational revenue 420,49 354,01

Profit/(loss) before otheritems, finance cost,depreciation & tax (13,92) (14,60)

Other items

Fuel surchargeadjustment for earlieryears being contested – 10,50

Provision for loss onassets retired fromactive use – 3,44

Profit/(loss) before financecost, depreciation & tax (13,92) (28,54)

Finance cost 48,22 44,88

Profit/(loss) beforedepreciation & tax (62,14) (73,42)

Depreciation 28,84 29,27

Profit/(loss) before tax (90,98) (102,69)

Less: Provision for taxation – (5,59)

Profit/(loss) after tax (90,98) (97,10)

Balance brought forwardfrom previous year (112,63) (15,53)

Balance carried toBalance Sheet (203,61) (112,63)

Dividend

In view of the loss during the year, no dividend isbeing recommended by the Board.

Performance

Your Company produced 89,256 MT of pulp andpaper during the year under review as compared to83,085 MT produced in the previous year and saleswere 86,323 MT as compared to 83,789 MT in theprevious year.

The gross operating revenue during the year underreview was `444,34 lakhs as compared to `372,44lakhs in 2012-13. Capacity utilization was 65% ascompared to 60% in 2012-13.

The loss before other items, finance costs,depreciation and tax was `13,92 lakhs compared tothe loss of `14,60 lakhs in the previous year. Thesevere power cut by the state grid continued duringthe year till July 2013 resulting in forced shut downof one paper machine leading to lower production.The rise in cost of major inputs continued duringthe year and affected working of the Company. Theavailability of prime raw material i.e. wood declinedfurther during the year resulting in increase in priceby 42% over & above to increase by 40% over lastyear. Coal price also increased by 12% during theyear besides steep increase in prices of majorchemicals ranging from 10% to 70%.

The net sales realization of paper was increased by15% from ̀ 42,250 to ̀ 48,711 per ton of paper duringthe year to compensate the increase in input cost;however, the impact of increase in production costcould not be passed fully in paper prices.

The wood availability in last quarter improved tosome extent and the management is hopeful thatprices of wood will soften in next season startingfrom October 2014. The power situation in the statealso improved by start of generation of hydel powerbecause of adequate rains in the state. However, thepaper market is under price pressure from firstquarter of 2014-15 because of duty free import ofpaper from South Asian countries under bilateraltreaties and strengthening of rupee against foreigncurrency.

Your Company's management is committed toimprove the working of the Company and takingnecessary efforts to improve the productivity,minimizing of input consumption in terms of perton of paper, development of new price remunerativepaper varieties and by control of wastages.

In a difficult industry environment, your Companyended the year under review with net loss after taxof `90,98 lakhs as against `97,10 lakhs in2012-13.

Finance

Your Company's finances have been strained due tocontinuous losses for the past five years.

Lenders granted moratorium by sanction of CDRpackage upto December, 2013 and principal termloan instalment payment will start from end of March


2014. Loans increased due to funded interest termloan resulting in increase of finance cost during theyear under review to ̀ 48,22 lakhs as against ̀ 44,88lakhs in 2012-13. Your Company has paid intereston working capital and FITL regularly and there areno dues in respect of these borrowings. The paymentof interest on term loans were due from January,2014 and the first installment of principal becamedue on the last day of this fiscal year.

Due to erosion of net worth fully on account ofcontinuous losses resulting in the tightness inworking capital due to which service of interest andfirst installment of term loan due in March end werenot paid on due date. Your Company has been ableto pay interest for the period January to March,2014 and first installment due on last day offiscal year during the first quarter of financial year2014-15.

Your Company is in discussion with lenders and isworking out a solution to address short fall inworking capital and repayment of term loan &interest thereon. Further, the Company also is indiscussion with lenders for disposal of surplus non-productive assets.

Your Company continues to avail sales tax defermentloan under the then Andhra Pradesh StateGovernment policy till March 2015.

Share Capital

In compliance with the terms and conditions of theCDR package & Master Restructuring Agreemententered with the lenders, a preferential issue of11,05,100 ordinary shares of ̀ 10 each at a premiumof ̀ 33 per share was made to a promoter in tranches.The promoter has brought in the balance contributionof `2,37 lakhs during the year and the Companyhas allotted 5,50,000 shares on August 14, 2013.Thus, the entire contribution of `4,75 lakhs wasbrought in by promoters. The new shares were listedon the stock exchanges during the year.

Reference to BIFR

The Company had submitted an application to theHon'ble Board for Industrial and FinancialReconstruction (BIFR) post erosion of net worth ofthe Company by more than 50% as per auditedaccounts for the year ended March 31, 2013. TheCompany had further submitted the requiredinformation in the formats as prescribed by theHon'ble BIFR on periodical intervals in relation tothe performance of the Company.

The net worth of the Company as at March 31, 2014,as per the audited accounts presented before the

Board, has been eroded fully. Under Section 15(1)of the Sick Industrial Companies (Special Provisions)Act, 1985, the Board of Directors has to make areference to BIFR, within sixty days from the dateof finalisation of the duly audited accounts at theannual general meeting, for determination of themeasures which shall be adopted by the Company.

Plantation

Efforts made for improvement of wood availabilityin previous years are now showing results asavailability of wood has improved over the previousyear. It is expected that during the year 2014-15the same will improve further and also bring downthe cost of wood to some extent. The Company hasfocused all its attention on assistance in plantationin Adilabad district & other catchment area. YourCompany is continuing the distribution of subabulseeds to farmers free of cost to improve availabilityof raw material in the long run and has alsoestablished nurseries for development of clonalplantation for better yield. Plantation has also beendone on all vacant land owned by your Company.The central and state government has also beenapproached by Indian Paper ManufacturersAssociation to allot degraded land for taking up largescale plantation.

Awards & accolades

During the year 2013, in appreciation of itsachievements in energy conservation in the paper& pulp sector, your Company has been awardedconsecutively second time the First Prize by Ministryof Power, Government of India. This prestigiousNational Award was received by Mr. DevashishPoddar, Vice-Chairman & Managing Director fromHon'ble President of India, Shri Pranab Mukherjee,in the presence of Hon'ble Minister for Power,Government of India, and several distinguishedguests on December 16, 2013.

Your Company has been once again declared winnerof 'First Prize for Energy Conservation' in the Smalland Medium Scale Industry Category for the year2012-13 by New & Renewable Energy DevelopmentCorporation of Andhra Pradesh Limited, andthe award was received at a function held onDecember 20, 2013 at Hyderabad.

Human resources development

During 2013-14, your Company has maintainedcordial industrial relations. Top priority is given tohuman resources initiatives especially training anddevelopment.


Particulars of employees

Statement on particulars of employees drawing `60lakhs or more per annum, if employed for whole ofthe year or `5 lakhs or more per month, if employedfor a part of the year pursuant to the provisions ofSection 217(2A) of the Companies Act, 1956 is givenin annexure 'B' and forms a part of this report.

Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the CompaniesAct, 1956, the Directors confirm that:

a. in the preparation of the annual accounts allapplicable accounting standards have beenfollowed and that no material departures havebeen made from the same;

b. they have selected such accounting policies andapplied them consistently and made judgmentsand estimates that are reasonable and prudentso as to give a true and fair view of the state ofaffairs of the Company at the end of the financialyear and of the loss of the Company for theyear ended on that date;

c. they have taken proper and sufficient care forthe maintenance of adequate accounting recordsin accordance with the provisions of theCompanies Act, 1956 for safeguarding the assetsof the Company and for preventing and detectingfraud and other irregularities; and

d. they have prepared the annual accounts on a'going concern' basis.

Particulars of conservation of energy, technologyabsorption and foreign exchange earnings and outgo

Particulars of conservation of energy, technologyabsorption and foreign exchange earnings and outgoas required to be disclosed under Section 217(1)(e)of the Companies Act, 1956 read with the Companies(Disclosure of Particulars in the Report of the Boardof Directors) Rules, 1988 are given in annexure 'A'attached hereto and forms a part of this report.

Auditors' Report

The observations made in the auditors' report areself-explanatory and therefore, do not call for anyfurther comments under Section 217(3) of theCompanies Act, 1956.

Auditors

The statutory auditors of the Company, M/s. DeloitteHaskins & Sells, Chartered Accountants, retire atthe conclusion of the forthcoming Annual GeneralMeeting.

As per the provisions of Section 139 of the CompaniesAct, 2013, they are eligible for re-appointment asauditors for a term of three years.

In accordance with the requirements of Sections139(1) and 141 of the Companies Act, 2013 readwith Rule 4 of the Companies (Audit and Auditors)Rules, 2014 they have confirmed in writing, theireligibility and willingness to accept office of thestatutory auditors for a period of three years fromthe conclusion of the forthcoming Annual GeneralMeeting.

The Board, on the recommendation of the AuditCommittee, has proposed that M/s. Deloitte Haskins& Sells, Chartered Accountants (ICAI FirmRegistration Number: 008072S) be re-appointed asstatutory auditors of the Company to hold office fromthe conclusion of the ensuing Annual General Meetinguntil the conclusion of seventy eighth Annual GeneralMeeting.

Corporate governance

Your Directors affirm commitment to good corporategovernance practices. During the year under review,the Company was in compliance with the provisionsof Clause 49 of the Listing Agreement with the stockexchanges relating to corporate governance.

A Report on Corporate Governance along with thecertificate of practicing company secretaries for itsdue compliance forms part of this annual report.

In view of accumulated losses, the provisions relatingto constitution of Corporate Social Responsibility(CSR) Committee are not applicable to your Company,till it meets the criteria specified in Section 135 ofthe Companies Act, 2013 read with rules framedthereunder. Hence, the Company has not constitutedCSR Committee.

Directors

The term of office of the Executive Director, ShriRameshwar Lall Lakhotia ended on July 23, 2014.At the meeting of the Board of Directors held onMay 29, 2014, he has been re-appointed as Whole-time Director designated as Executive Director witheffect from July 24, 2014 for a further period oftwo years on remuneration and other terms asapproved by the remuneration committee. Theproposal for the reappointment of Shri RameshwarLall Lakhotia as Executive Director, remunerationand other terms are being placed for approval ofthe Members at the ensuing Annual General Meeting.Approval of the Central Government will be sought,where required. The Board recommends passing ofa Special Resolution confirming his re-appointment.


Shri Sudhir Jalan and Shri Rakesh Bhartia, Directorsof the Company resigned from the Board of Directorsof the Company and vacated the Office as Directorsof the Company due to personal reasons with effectfrom December 11, 2013 and February 10, 2014,respectively. The Board placed on record its highappreciation for the valuable advice rendered by ShriSudhir Jalan and Shri Rakesh Bhartia, during theirtenure as directors of the Company.

In accordance with the provisions of Companies Act,2013 and the Articles of Association of the Company,Shri Ranjan Kumar Poddar, Director of the Companywill retire by rotation at the ensuing Annual GeneralMeeting and, being eligible, offers himself for re-appointment.

In accordance with the provisions of the CompaniesAct, 2013 and the Listing Agreement, the office ofdirectorship of Shri Laxminiwas Sharma and Shri P.Vaman Rao, existing Independent Directors pursuantto Clause 49 of the Listing Agreement, was liable toretirement by rotation. Consequent uponcommencement of the Companies Act, 2013, Section149 of the Act provides that every listed Companyshall have at least one-third of the total number ofdirectors as Independent Directors, who are not liableto retire by rotation and shall hold office for a termup to five consecutive years.

Accordingly, it is proposed to appoint ShriLaxminiwas Sharma and Shri P. Vaman Rao, asIndependent Directors under Section 149 of the Actand revised Clause 49 of the Listing Agreement tohold office for five consecutive years fromSeptember 29, 2014 for a term upto the conclusionof the Eightieth Annual General Meeting of theCompany to be held in the calendar year 2019.

The Board of Directors appointed Shri Vedula Srinivasas Additional Director with effect from August 11,2014 in the category of Independent Non-ExecutiveDirector under Section 149 of the Act and revisedClause 49 of the Listing Agreement to hold office forfive consecutive years from September 29, 2014 fora term upto the conclusion of the Eightieth AnnualGeneral Meeting of the Company to be held in thecalendar year 2019, whose office shall not be liableto retire by rotation.

The Board recommends the appointment of ShriLaxminiwas Sharma, Shri P. Vaman Rao and ShriVedula Srinivas as Independent Directors not liableto retire by rotation and to hold office for a periodof five years up to the conclusion of the EightiethAnnual General Meeting of the Company to be heldin the calendar year 2019.

The Board of Directors appointed Shri PadmanabhanNagarajan as Additional Director, with effect fromAugust 11, 2014 pursuant to the provisions of Section161(1) of the Companies Act, 2013 and the Articlesof Association of the Company and he shall holdoffice upto the date of the ensuing Annual GeneralMeeting. The Board recommends the appointmentof Shri Padmanabhan Nagarajan as Director of theCompany, liable to retire by rotation.

The Company has received declarations from all theIndependent Directors of the Company confirmingthat they meet with the criteria of independence asprescribed both under sub-section 6 of Section 149of the Companies Act, 2013 and under Clause 49 ofthe Listing Agreement with the stock exchanges.

Your Board recommends the above appointment/re-appointment of Directors in the best interest ofthe Company.

Chief Financial Officer

Shri Vimal Arora, B.Com., F.C.A., has been appointedas Chief Financial Officer (CFO) of the Companypursuant to the provisions of Section 203 of theCompanies Act, 2013 read with Clause 49 of theListing Agreement with the stock exchanges by theBoard of Director in its meeting held on May 29,2014 in place of Shri S. K. Modani, who has left theservices of the Company.

Cost accounting records

Pursuant to the provisions of Section 233B of theCompanies Act, 1956, your Directors have appointedM/s. S. S. Zanwar & Associates, Cost Accountants,Hyderabad as the cost auditors to conduct the costaudit of your Company for the financial year endedMarch 31, 2014, which has been approved by theCentral Government. Your Company has filed theCost Audit Report for the year ended March 31, 2013on September 21, 2013. Further, the Cost AuditReport for the financial year ended March 31, 2014will be filed within the stipulated time.

Acknowledgements

Your Directors thank the customers, suppliers,farmers, financial institutions, banks and Membersfor their continued support and also recognize thecontribution made by the employees towards theCompany's growth.

By order of the Board

Hyderabad, Ranjan Kumar PoddarAugust 11, 2014 Chairman


Annexure 'A' to Directors' Report

Particulars as required under Section 217 (1) (e) of the Companies Act, 1956 and forming part of theDirectors' Report for the year ended March 31, 2014

A. CONSERVATION OF ENERGY

1. Measure taken for conservation of energy

a. Installation of new VFDs at EOP vat dilution pump weak liquor supply pump to optimize process.

b. Installed VFD at tower dilution pump & D-1 washer spray pumps to conserve electrical energy.

c. Upgradation of Paper Machine No. 4 & Paper Machine No. 5 salvage rewinder DC drive tominimize losses.

d. Old coal crusher & coal feeding arrangement was modified & stopped 2nd stage coal conveyer tosave energy.

e. Installed & commissioned VFD at water supplying booster pump for paper machines to on servewater & electrical energy.

f. Alfa Laval evaporators' vacuum system was modified and thus saved electrical energy.

g. Alfa Laval evaporators' liquor solids concentration increased along with black liquor.

h. Firing system modification and reduced furnace oil consumption and conserved thermal energy.

i. Replaced aluminum alloy fan with FRP hallow blade fan assembly at turbine cooling towerconserve electrical energy.

j. Installed VFD at fan pumps in Paper Machine No. 2 for conservation of electrical energy andadjust process parameters.

k. Installed vibratory screens at Paper Machine No. 1 & 3 to improve the quality.

l. By providing 2.5 Kg/cm2 steam in place of 4 Kg/cm2 steam at evaporator, thermal energysaved.

2. Additional investments & proposals, if any

a. Installation of new energy efficient pumps and motors in process operation to achieve the PATtarget.

b. Energy efficient vacuum pumps for Paper Machine No. 3 & Paper Machine No. 6.

c. Installation of new floating type aerator in aeration lagoon in effluent treatment plant.

d. Proposed water supply to colony with energy efficient pump & modification in service line diato conserve water & electrical energy.

e. Installation of new VFDs at paper machine area.

f. 250 KW roof top solar energy plant to be put on for the REC compliance.

3. Impact of the above measures on consumption of energy

The implementation of above energy conservation has reduced the distribution losses and savedelectrical & thermal energy considerably.

4. Total energy consumption and energy consumption per unit of production

Form - A annexed.

B. TECHNOLOGY ABSORPTION

Efforts made in technology absorption

Form - B annexed.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

i. During the year under review there was no exports except sales through merchant exporters.Efforts are being made to augment exports.

ii. Total foreign exchange used and earned:

Used1 : `151.65 Lakhs

Earned : Nil1 On actual payment basis.


F O R M - A(Form for disclosure of particulars with respect to conservation of energy)

A. POWER AND FUEL CONSUMPTION1

2013-14 2012-13

Electricity

a. Purchased units (Lakhs Kwh) 625.17 485.62

Total amount (` Lakhs)# 35,32.27 28,24.22

Rate/unit (`)# 5.65 5.82

b. Own generation through steam turbine/generator

Units (Lakhs Kwh) 891.69 918.00

Units per litre of fuel oil/Gas – –

Cost/unit (`) 1.53 2.05

Coal {Grade C to F (R.O.M.) used in boiler & rotary lime kiln}1

Quantity (MT) 1,95,281 2,01,751

Cost (` Lakhs) 55,26.72 50,87.16

Average rate/MT (`) 2,830 2,521

Furnace oil

Quantity (KL) 3,996 3,711

Cost (` Lakhs) 16,65.66 15,22.62

Average rate/KL (`) 41,686 41,030

# Excluding FSA & PDL charges of earlier years.

B. CONSUMPTION PER UNIT OF PRODUCTION1

2013-14 2012-13

Product Electricity Furnace oil Coal Electricity Furnace oil Coal(Kwh) (Ltrs) (MT) (Kwh) (Ltrs) (MT)

Paper, paper boardand pulp (for sale) 1699 45 2.188 1689 45 2.428

1 Excluding consumption in colony.


F O R M - B(Form for disclosure of particulars with respect to technology absorption)

RESEARCH AND DEVELOPMENT (R&D)

Specific areas in which R&D was carried out by the Company

a. New Products development

i. Unbleached cartridge paper - developed and trial taken on machine.

ii. Deep coloured yellow, orange and red maplitho - developed as per customer requirement andtaken for regular production on machine.

iii. Black pastel paper - developed and samples sent for customer approval.

iv. Copier paper - developed and samples sent for customer approval.

b. New process development

i. Adoption of use of GCC as filler in place of talcum powder in paper.

ii. Adoption of the use of on machine spray starch sizing system.

iii. Use of spent caustic of other industry in pulp bleaching process.

iv. Use of EOP stage outlet pulp in the manufacture of coloured varieties of papers.

Benefits derived as a result of above R&D

i. Products developed have enabled us to increase product range, enhance product quality andreduce input cost.

ii. Meet customer requirement.

iii. Resource conservation and balancing the chemical circuits.

Future plan of action

i. New product and process development.

ii. Increasing the GCV of BL solids by innovative methods.

iii. Optimizing the pulp bleaching process to further improve brightness along with pulp strengthpreservation.

iv. Use of refiner enzyme in EOP outlet pulp processing.

Expenditure on R&D (` Lakhs)

a. Capital –

b. Recurring 10.69

c. Total 10.69

d. Total R&D expenditure as a percentageof total turnover 0.03


TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts made in brief towards technology - Investing in technology absorption to keep pace withabsorption, adaptation and innovation development.

- Innovate in the existing processes to enhance qualityand production.

2. Benefits derived as a result of the above - Effective and optimum use of utilities like power, coaland water etc by making use of natural and renewableresource like sunlight.

- Resource conservation.

- Customer satisfaction.

3. In case of imported technology(imported during the last 5 yearsreckoned from the beginning of thefinancial year)

a. Technology imported - Not applicable

b. Year of import - Not applicable

c. Has technology been fully absorbed - Not applicable

d. If not fully absorbed, areas where - Not applicablethis has not taken place, reasonstherefore and future plan of action

Annexure 'B' to Director's Report

Statement of particulars of employees as required under Section 217(2A) of Companies Act, 1956 read withCompanies (Particulars of Employees) Rules, 1975 and forming a part of the Directors' Report for the yearended March 31, 2014

Name Shri Devashish Poddar

Age 41 years

Designation Vice-Chairman & Managing Director

Remuneration (`) 67.12 Lakhs*

Nature of duties Oversees the growth and future strategies of theCompany

Qualification B.B.A. (London)

Total experience 15 years

Date of joining August 1, 1999

Last employment held –

* pending approval of Central Government, the remuneration has been restricted as above.

Notes

1. Remuneration includes actual payment and/or taxable value of perquisites and the Company's contributionto provident and other funds but excluding provision for gratuity, accumulated leave and long serviceaward.

2. Nature of employment: On contract

3. Other terms and conditions: As per rules of the Company.

4. He does not hold 2% or more of the ordinary shares of the Company by himself or along with his spouseand dependent children.

5. Shri Devashish Poddar is a relative of a Director.



GLOBAL PERSPECTIVE

The paper industry performance is influenced byeconomic growth, industrial production, promotionalexpenditure, population growth, global trade,corporate prosperity, literacy, advertising anddemand-supply dynamics.

Across the world, the paper and paperboard industryproduces about 400 million metric tonnes and isdominated by North America, Western Europe andJapan. While over 50% of the consumption is in thedeveloped economies, demand growth for writing andprinting paper is modest in these mature markets.Consumption in Asia, primarily China, India andIndonesia are growing faster than in the developedmarkets attracting fresh investments in thesecountries.

As in the case of writing and printing (W&P) paper,demand for the packaging grades are also growingfaster in the developing economies compared tomature markets of North America & Western Europe.

Major paper producing countries of Latin America,Europe and Asia, including China, Indonesia,Malaysia and a few others have adopted a policy ofgranting forest concessions to large paper mills toplant, protect and harvest pulpwood in a costeffective manner. In the absence of similar enablingpolicies, paper mills in India have to necessarilydepend upon farmers holding barren, marginal anddegraded lands for plantations developed throughthe industry's social forestry initiative or fromgovernment controlled forests. In the process, thecost of collection and transportation works out to begreater than the cost of the pulpwood itself. Rawmaterial cost in India has been continuously goingup and has become most non-competitive incomparison to the major paper producing countriesin the world.

During the year, the global paper business scenariowas mixed with high feedstock prices, low demandgrowth but with low capacity addition. Global growthpicked up in the second half of 2013-14, averaging3.5% - a marked uptick from the 2.5% recordedduring the previous six months. The impulse hascome mainly from advanced economies, althoughtheir recoveries remain uneven. Global paper activityis expected to improve further in 2014-15.

INDIAN PAPER INDUSTRY

India's GDP growth is expected to recover from 4.4%in 2013-14 to 5.4% in 2014-15, supported by slightlystronger global growth, improving exportcompetitiveness and heightened industrial activity.

Paper industry is positively correlated to GDP growthtrends. Anecdotally, every 100 bps improvement inGDP enhances paper demand in India by 1 kg percapita. The industry therefore hopes that the GDPgrowth is secular and translates into consistent andcontinuous growth for the paper industry.

Indian paper industry is among the 15 largest paperindustries in the world. The Indian paper industryis a major contributor to the nation's growth anddevelopment. It is in this spirit that the Indian paperindustry has continued to upgrade its capacities andtechnologies.

The domestic demand for all varieties of paper inIndia is estimated at around 13.10 million tonnesper annum which is about 3% of global demand of400 million tonnes even though Indian populationof 121 crore as per 2011 census constitutes 17% ofthe world population. Of this, writing & printing paperaccounts for approx. 4.10 million tonnes, packaginggrades approx. 5.90 million tonnes and newsprintabout 2.50 million tonnes apart from specialty gradeabout 0.60 million tonnes.

Even though the domestic paper consumption hasbeen growing steadily, it is still below 10 kg percapita, which is abysmally low when compared tohighly populated and developing economies. Forinstance, per capita consumption in China &Indonesia is estimated at 75 kgs and 23 kgs,respectively.

Paper industry is capital intensive and in order toraise the return on investment, it requires the urgentattention of the government for creation of robustraw material base, fiscal incentive for assimilationof eco-friendly technologies etc. The economic surveyof 2013-14 clearly highlights drying of investmentin projects in the economy and the paper industry isnot isolated from the same. The working results ofthe Indian paper industry continued to be adverselyaffected by the overriding sluggish market conditionscoupled with a steep hike in the cost of raw materialstogether with deteriorating quality, chemicals, coaland furnace oil. The upward revision in minimumwages, finance charges etc., put added pressure onthe margins.

Continued reduction of peak import tariff byGovernment of India will expose the industry to floodof import and will significantly alter the fortune ofthe industry. Mills from South Asia started offeringpulp & paper at very low prices as a means ofevacuating their production.

Improvement in the market sentiments has had apositive impact on the economy since early 2014.


As a consequence, paper market has taken a positiveturn and expects that results for the current yearshould improve, with better sales realisation.

Key growth drivers for paper industry in India: Thegrowing Indian economy will create more demandfor paper due to:

� More jobs will create higher demand for office/printer paper;

� Focus of government on education;

� Increasing literacy levels;

� Circulation/readership of newspapers/periodicals increasing;

� Higher usage of packaged products;

� Focus on marketing campaigns for products;

� Increased demand from hygiene/hospitalitysector.

SIRPUR PAPER - A PERSPECTIVE

Indian paper industry witnessed anotherdisappointing year. While paper prices improved tosome extent towards the end of the financial year,this has not been adequate to cover the steepincreases in input costs of pulp wood, coal, freightetc. Consequently, margins for Sirpur Paper Mills(SPM) remained under severe pressure throughoutthe year. Production and turnover was higher thanprevious year despite high level of competition.Efforts were made to improve efficiency at alloperational levels, thereby minimizing the impactof cost increase of various inputs. SPM exercisedstrict control over expenses, however, certainexpenses, which are under government control orin short supply, remained beyond the control ofmanagement. Paper industry is capital intensiverequiring increased funds to ensure businesscontinuity as a result of which cost of debt is a criticaldeterminant of success.

To be globally competitive and a low cost producerof paper, SPM focused its attention on the followingstrategies:

� Effective consumer centric engagement;

� Innovative, effective cost management ofmaterials and production process;

� Efficient and responsive supply chain network;

� Improvement in brand health and marketstanding;

� Better utilization of human resources, finance& assets;

� Financial re-engineering;

� Upgradation of technology and expansion;

� Customised product development;

� Enhanced accountability & transparency;

� Dedicated social obligation.

Marketing & distribution

Despite such a challenging business scenario, SPMhas successfully enhanced its market standingthrough robust strategies and excellence in execution.SPM will continue to invest in development ofproducts that are 'best-in-class' and offer superiorand differentiated value propositions to consumers.

The Company remains confident that despite severepressures, its robust product portfolio, better quality,innovation in processes and investment in cutting-edge technology and superior execution ofcompetitive strategies will enable SPM to sustainand reinforce the market standing in the years tocome.

Gross revenue from operation increased in currentyear by 19% to `444,34 lakhs from `372,44 lakhsin the previous year. Net revenue from operation in2013-14 increased to `417,54 lakhs from `349,92lakhs in the previous year.

Raw material

The basic raw material of the Company is bamboo/wood. Wood is in short supply due to both heavyincrease in demand and lack of interest of farmersto grow this commodity vis-a-vis other cash crops.A scarcity in raw material supply is a threat. Inpaper manufacture, the question of raw materialsecurity is more relevant than in most otherindustries because the rampant exploitation of rawmaterial sources could have a climatic impact.

The growing paper demand could soon lead to a sharpincrease in raw material costs. Sirpur isadvantageously placed in this regard. The Company'splant is situated at Kagaznagar in Telangana, a statewhere sizeable land is under forest cover. TheCompany sourced 80% of its wood requirementsthrough Agricultural Marketing Committees -government regulated agency - at governmentdetermined prices. The dearth of raw materials isaffecting all paper companies as manufacturers arenot allowed to own land to raise plantations forcaptive pulpwood supply, impacting growth andachieving economies of scale. Total cost of materialconsumed increased in the current year by 42% to`243,28 lakhs from `172,35 lakhs in the previousyear.

Research & development

Over the years, Sirpur has made product researchand innovation inseparable from productmanufacture. This has helped it expand existingcustomer business and reach out to new customerswhile achieving superior realizations. It invested


increasingly in research to upgrade and modernizeplant operations. At Sirpur, research anddevelopment spending encompassed three areas oftrouble shooting, process and quality improvementbesides product development.

In its continuous pursuit of increasing the productrange, producing superior products and enhancingthe production process, SPM notably achieved thefollowing:

� Successful use of certain types of Indianhardwoods with bark, which have not been triedso far in the paper industry. This helped themill in overcoming the raw material shortage tosome extent;

� Keeping in view the market demand, certain newproducts in different colours have beendeveloped, manufactured and supplied to themarket. These are expected to increase theproduct range apart from opening up newavenues for marketing;

� Introduced machine spray starch sizing systemon one paper machine to enhance its paperproperties;

� Usage of spent chemicals of some other industryas raw material in the process; thus not onlysaving the natural resources but also helpingthe other industry to minimize their wastedisposal and associated pollution problems;

� Process modifications had been carried out inthe processes to reduce the cost of productionof certain grades of paper without sacrificingthe quality of the products, particularly thecoloured varieties.

SPM aims to relentlessly enhance quality, enhanceproductivity and introduce new and value addedproducts to meet the customer requirements.

Internal control & audit systems and their adequacy

The Company has established adequate internalcontrol & audit systems, which provide reasonableassurances with regard to safeguarding Company'sassets, promoting operational efficiencies andensuring compliance with various statutoryprovisions. The internal audit department regularlyreviews internal control systems in businessprocesses and verifies compliance with the laid downpolicies and procedures. Reports of the internal auditdepartment are reviewed by the senior managementand are also placed before and comprehensivelydiscussed at the meetings of the Audit Committee.

The Audit Committee reviews the adequacy ofinternal control systems, audit findings andsuggestions. The internal audit department also keepsa track of and monitors the progress on

implementation of suggestions for improvements. TheCompany's statutory auditors regularly interact withthe Audit Committee to share their findings and thestatus of actions under implementation.

Human resource development/industrial relations

The Company takes pride in its record of maintainingcongenial and healthy industrial relations. Duringthe year under review, industrial relations wereharmonious at our unit. The wages settlement forworkmen & staff are due for revision.

The industry is grappling with a decline in theavailability of skilled manpower as well as thosewilling to work in remote locations where most paperfactories are based.

The Company has adopted a progressive policy todevelop its human resources through continuoustraining and motivation, to achieve greaterefficiencies and competencies. Need based trainingprogrammes are conducted by internal faculty whoare subject matter experts in their areas. Trainingprogrammes cover behavior, technical, health &safety aspect. In addition, on job training is alsobeing provided. The significant progress made bythe Company was possible in no small measure byefforts of the entire team.

SPM has taken concrete steps to improveorganizational health by creating focusedmanagement teams with specific targets for growthin volumes and profitability while building andretaining talent. Safety, welfare and training at allemployee levels continue to be areas of major focusfor the Company.

Daily & periodic review meetings are conducted forsenior executive and staff where developments invarious department of the organization are discussedand appreciated. It is an integral activity of thecompany to give importance to develop theintellectual capital of employees through systematicstructured training programmes.

HEALTH

Occupational Health Hospital has been functioning inthe housing colony catering to the health needs ofthe employees and their dependents. The Companybears medical expenses apart from offering freemedicine. Comprehensive medical checkup is done foremployees to identify any occupational health hazard.

INFORMATION TECHNOLOGY UPGRADATION &EXPANSION

In order to progress business performance, SPM hasimplemented the following new businessfunctionalities:

� Automation of workers attendance reports bydiscontinuing the manual records maintenance;


� Fine tuning the existing integrated weigh bridgesoftware with SAP;

� Upgrade the customer portal;

� Enhancement of label printing for reams throughSAP;

� Performance evaluation of biometric time andattendance system;

� In order to utilize SAP system effectively andefficiently, the central support team hascompleted the following activities during thefinancial year 2013-14:

a. Refresher training provided to all SAPusers;

b. Preparation of end-user manual, which helpsthe users for smooth functioning of theirday-to-day activities;

c. Development of new reports in FICO, MM &SD modules.

Going ahead, the Company will upgrade the existingSAP 4.7 EE version to latest SAP 6.0 ECC, so as toget continuous support from ERP. Other significantareas are being upgraded. The Company willimplement business warehousing to facilitatebusiness intelligence for better data analysis andreporting. Implementation of new pay roll packageand integration with attendance system is anotherarea to be planned.

ENVIRONMENT

SPM ensures that:

� Compliance with all relevant legislativerequirement;

� Reducing pollution load in terms of liquiddischarge, air emission and land contamination;

� Minimize waste and maximize recycling/reuse;

� Creating human awareness in environmentsafety and health;

� Promoting comprehensive programme forcontinual improvement of environmentalperformance;

� Stimulate rational use of resources throughbehavioral and technological improvements.

ANALYSIS OF FINANCIAL STATEMENTS

The Company recorded a production of 89,256 MTof pulp and paper in the year 2013-14 as against83,085 MT in the previous year, an increase of7.43%. The capacity utilization remained static onan annualized basis though it could have been better.Shortage of power availability from Government ofAndhra Pradesh due to imposition of severe

restriction & control measures impacted all theindustries.

The availability of raw material, i.e. wood, continuedto be poor in the year resulting in higher cost ofraw material. The non-availability of raw materialcaused impediment in manufacturing. Increment inpaper price was finally accepted by the market. Inthe meantime, sentiment of market was disturbedwhen the paper prices were increased. Sirpurwitnessed accumulation of stock gradually sinceNovember 2013 which blocked working capital cycle& availability of funds for raw material.

In a capital intensive business, Sirpur requiredadequate low cost funds. While the Company moblisedshort-term funds to meet working capital needs, long-term loans were raised to meet capital expenditure.Finance cost increased from `44,88 lakhs in theprevious year to `48,22 lakhs in the year underreview. Increase in employee cost by `2,52 lakhs in2013-14 is attributed to hike in wages. There wassignificant reduction in stores & spares consumedby 14.76% from 17,20 lakhs in 2012-13 to `14,66lakhs in 2013-14.

In spite of setbacks, by process optimization Sirpurcontinued to focus on enhancing competitivenessthrough improved operational efficiency, conservationof resources, reduction in fiber loss and consumptionof steam, power and water.

Several initiatives taken by the Company during theyear increased gross revenue from operation by 19%to ̀ 444,34 lakhs from ̀ 372,44 lakhs in the previousyear. Net revenue from operation in 2013-14increased to `417,55 lakhs from `349,93 lakhs in2012-13.

Loss before other items, finance costs, depreciationand tax was `13,92 lakhs in 2013-14 as against aloss of `14,60 lakhs in the previous year. Interestcost during the year, in view of the CDR packagereduced marginally though fresh loan by way of FITLincreased the overall finance cost to `48,23 lakhsfrom `44,88 lakhs. Depreciation was marginallylower at `28,84 lakhs.

The loss after tax decreased from `97,10 lakhs inthe previous year to ̀ 90,98 lakhs during the currentyear.

Cost analysis

The weighted average prices of the main raw materiali.e. wood increased by over 42% which could not bepassed on to customers fully. The impact of the inputprice hike was marginally set off due to theCompany's incessant efforts in cost control, materialmanagement and productivity improvement. Theborrowing cost of the Company on its term loan andworking capital facilities reduced marginally.


The Company has initiated a number of concretesteps to overcome challenges. Most of these initiativeshave already started yielding positive results. Theteam at Sirpur feels confident of significant furtherimprovements as they move forward to reshape theCompany into a healthy and fast growingorganization.

Share capital & securities premium: The sharecapital of the Company during the year increased to`16,99 lakhs from `16,44 lakhs & an increase insecurities premium by ̀ 1,81 lakhs with the allotmentof fresh ordinary shares during the year to apromoter group company.

Reserves and surplus: The reserves and surplus ofthe Company (without revaluation reserve) stood at`(45,38) lakhs

Loan funds

In view of the CDR package, repayments of termloan have been deferred till March 2014. Intereston term loans has been converted into FITL up toDecember 2013. Interest on FITL was duly paidduring the year. Interest on term loans is payablemonthly from January 2014. The Company continuesto avail sales tax deferment loan.

On account of CDR scheme, the Company's long-termborrowings increased from ̀ 308,46 lakhs to ̀ 315,15lakhs.

Utilisation of funds

The net fixed assets (without revaluation reserve)decreased from `382,83 lakhs to `356,24 lakhs onaccount of deprecation charged and sale of some oldand obsolete assets. Additions to the fixed assetsduring the year was to the tune of `11,69 lakhs.

Current assets & liabilities

Current assets as at March 31, 2014 were `144,20lakhs as compared to `146,48 lakhs, a year ago.Current liabilities increased from 132,71 lakhs to`186,87 lakhs, an increase of `54,16 lakhs.

Inventories

There was an increase of about `5,16 lakhs from`40,96 lakhs to `46,12 lakhs in holding levels offinished goods mainly due to less offtake vis-a-visproduction, during the year 2013-14.

Trade receivables & payables

Trade receivables decreased from `63,42 lakhs in2012-13 to `60,08 lakhs during 2013-14. Thedebtors' cycle was at 55 days as against 65 days inthe previous year. Marginal decrease in absoluteamount of receivables was due to new market policy

which favorably impacted the cycle time, on acomparative level. The trade payables increased from`80,40 lakhs in 2012-13 to `94,70 lakhs during2013-14.

CORPORATE SOCIAL RESPONSIBILITY

In view of accumulated losses, the provisions ofSection 135 of the Companies Act, 2013 are notapplicable to the Company, relating to constitutionof CSR Committee, till such time it meets the criteriaspecified in sub-section (1) of the said Act read withCSR Rules, 2014. SPM is always socially responsibleand continuously strives to help develop thecommunity. In pursuance of its efforts to make adifference, as always, the Company provided financialaids to various educational institutions, temples,mosque, and conducted sports and recreationalprogrammes for the society at large.

In addition to these, the Company has taken upseveral initiatives such as providing training to thestudents in the fields of engineering, technology,business management; industrial training topolytechnic students; supply of water to the nearbyvillages; maintaining children's park and recreationclubs etc.

OUTLOOK

SPM continues its relentless focus on strengtheningcompetitiveness in its business. It is the endeavourof the Company to deploy resources in a balancedmanner so as to secure the interest of theshareholders in the short, medium & long term. TheCompany has also taken several steps for operationalrestructuring which are expected to lead to higherefficiency/cost savings. Despite the challenges of thepresent, the Company looks forward to the futurewith confidence.

SPM sought flexibility from the lenders and acomprehensive restructuring of its outstanding debtwas approved by the lenders under the aegis of theCorporate Debt Restructuring (CDR) platform. TheCompany has been sanctioned a moratorium ofinterest and principal for 21 months from the cut-off date i.e. April 1, 2012 and the paymentcommenced from January 2014.

In all the operations, the focus will be on improvingassets utilization through market expansion & betterpenetration as well as margin improvement throughinternal efficiency and cost control measures. Theaim is to deliver better value for all the stakeholders.Based on a positive outlook and the Company'sinherent strengths, the team is confident of betterperformance in 2014-15 and beyond.


Every business carries risks and uncertainties thatcan affect financial conditions, results of operationsand prospects. The Company regularly identifies andassesses the risks associated with its business andcorrespondingly coordinates optimum resourceapplication to minimize their impact.

Industry risk

A slowdown in the paper industry could impact itsgrowth.

In the medium to long run, the Indian economy isexpected to grow much higher compared to the globalaverage. The paper industry has a positivecorrelation to the macroeconomic trends whichaugurs well for the paper industry in India. Giventhat literacy and aspiration levels are expected toimprove year-on-year, paper companies should bebeneficiaries of the demographic dividend.

Further, Sirpur Paper offers one of the widest productranges among Indian paper manufactures acrossthe writing, printing & industrial segments, whichprovides some cushion against the adverse marketconditions.

Raw material risk

Inadequate availability of raw material could impactproduction.

Wood, an agricultural produce, is a principal rawmaterial. The Company recognizes quality of rawmaterial and availability in required quantities intimely manner is imperative for uninterruptedproduction processes. Requirement of wood is mostlyprocured from the farmers in a radius of 600 kms.

In order to augment supplies of raw material, theCompany encourages social forestry/farm forestryby supporting farmers to improve plantationpractices, develop nurseries to propagate clonalseedling varieties and distribute quality plantingmaterial to farmers at subsidized rates.

Yet, the situation turned adverse in the past twoyears, impacting the economics of the entire industry.Rising wood prices in the previous year createdinterest in farmers and large scale planting wereundertaken by them, reducing the supply-demandmismatch.

Product risk

Inability to strengthen the brand could impactrevenues.

There are a few product differentiators in the paperindustry. Hence, the Company markets value-addedproducts under the 'Sirpur' brand through a wellestablished supply chain. The Company produces anumber of varieties and has a presence in writing& printing paper, specialty paper, paper board aswell as kraft paper.

Further, the Company plans to expand its range withits own branded copier and Xerox paper. TheCompany is striving to manufacture high valueproducts in a bid to improve realisation and sustainthe long-term growth of the Company.

Technology risk

Failure to keep pace with the production technologycan affect productivity.

The Company has been investing in technology andinfrastructure to keep pace with the developments.Ongoing efforts will continue to optimise processesand enhance productivity.

Full benefits of the Mill Development and ExpansionPlan implemented in 2008-09 are likely to be visibleas soon as the plant is able to raise its productioncapacity, when grid power availability and rawmaterial supplies improve. The Company'sunremitting efforts towards cost control, yieldmanagement and productivity improvement havealready resulted in savings in the consumption ofinputs per MT of product which to an extent offsetthe impact of the input price rise.

As the power availability in the state is improving,the production is being ramped up and theCompany's management is making all out efforts tolower its costs, improve volumes and enhanceprofitability.

Regulatory risk

Adverse regulatory norms could hamper thebusiness.

As a responsible corporate citizen, Sirpur Paper iscommitted to regulatory compliance. While meetingthe CREP norms, it has adopted latest technologyfor elemental chlorine free bleaching of pulp andrecycling of water besides undertaking severalmeasures for environment protection.

Demand risk

Increasing use of electronic medium could lowerdemand of paper.

With the increase in budgetary allocation for theeducation sector as per the 2013-14 budget, the percapita consumption of paper, which is low whencompared to global average is set to increase.Similarly, improving standard of living and risingliteracy rate are expected to accelerate demand forpaper and raise the consumption levels.

Geographic risk

Dependence on a particular geography or buyerscould adversely affect the operations.

The Company has a wide range of products and themarketing network is spread across the country witha large customer base. There is no concentration ofcustomers or market, and the Company enjoys awider reach.

Management of Risk


The Directors present the Company's report on Corporate Governance.

1. The Company's Corporate Governance Philosophy

Corporate Governance is the application of management practices, compliance of law and adherence to

ethical standards to achieve the company's objective to enhance shareholder value. Corporate governance

is the structure by which responsibilities are assigned and authority entrusted among the Board of

directors, senior management and employees etc.

At, Sirpur Paper, the core principles of Corporate Governance are based on transparency, integrity,

accountability and commitment to values. Empowerment to employees is given with freedom to decide,

execute and deliver, accompanied however with responsibility. This governance structure and the core

principles ensure performance discipline, meet shareholders' aspirations and lead to public confidence.

2. Composition of the Board

I. The Board of directors of the Company consists of eminent persons with professional expertise. The

Board comprises one managing director, one whole time director and five non-executive directors, of

whom three are independent directors as on March 31, 2014. The composition of the Board is in

conformity with the requirements of the listing agreement with the stock exchanges.

Executive/ Independent No. of other Committee

Name of the Directors Non-Executive status directorships Membership of

Director held other companies

Member Chairman

Shri Ranjan Kumar Poddar Non-Executive Promoter 2 2 –

Chairman

Shri Devashish Poddar Executive Vice-Chairman & 5 1 1

Managing Director

Shri Rameshwar Lall Lakhotia Executive Whole-time Director – – –

Shri Laxminiwas Sharma Non-Executive Independent 3 – 1

Shri P. Vaman Rao Non-Executive Independent 2 1a 2

Shri G.S. Srinivasan Non-Executive Nominee of – – –

IDBI Bank - lender

Ms. Poonam Bodra Non-Executive Independent – – –

Shri Sudhir Jalan1 Non-Executive Independent – – –

Shri Rakesh Bhartia1 Non Executive Independent – – –

a including memberships in remuneration committee

1 Shri Sudhir Jalan and Shri Rakesh Bhartia resigned as directors with effect from December 11, 2013 and

February 10, 2014 respectively.



II. Directors' attendance details at the meetings and their shareholding

No. of board Last AGM No. of ordinaryName of the Directors meetings attended attended shares held

during the year

Shri Ranjan Kumar Poddar 3 Not Present 2,330

Shri Devashish Poddar 5 Present –

Shri Rameshwar Lall Lakhotia 4 Present –

Shri Laxminiwas Sharma 4 Present –

Shri P. Vaman Rao 4 Present 2

Shri G. S. Srinivasan 4 Not Present –

Ms. Poonam Bodra 3 Present –

Shri Sudhir Jalan – Not Present –

Shri Rakesh Bhartia – Not Present –

Note: During the year, five board meetings were held on May 13, 2013; August 14, 2013; September 30,

2013; November 13, 2013 and February 13, 2014.

3. Audit Committee

I. Presently, the Audit Committee comprises of one executive director and four non-executive directors,one of whom is the IDBI nominee. One director is a chartered accountant having accounting andfinancial background. Shri P. Vaman Rao is the Chairman of the Committee. The Committee met fourtimes during the year on May 13, 2013; August 14, 2013; November 13, 2013 and February 13,2014 and the attendance of the Members at the meetings was as follows:

Name of member Status Meetings attended

Shri P. Vaman Rao Chairman 3

Shri Rameshwar Lall Lakhotia Member 3

Shri Laxminiwas Sharma Member 4

Shri G. S. Srinivasan Member 4

Ms. Poonam Bodra1 Member –

Shri Rakesh Bhartia2 Member –

1 Ms. Poonam Bodra was appointed as Member of the Committee with effect from February 13, 2014.2 Shri Rakesh Bhartia resigned as Member with effect from February 10, 2014.

The Chief financial officer, Internal auditor and Statutory Auditors are the permanent invitees. TheCompany Secretary is the secretary of the Committee.

The Chairman of the Audit Committee was present at the Annual General Meeting of the Companyheld on September 30, 2013.

The objective of the Audit Committee is to monitor and effectively supervise the Company's financialreporting process with a view to provide accurate, timely and proper disclosure. The Audit Committeehas power to investigate any activity, seek information from any employee and obtain legal andother professional advice.

II. TERMS OF REFERENCE1

The terms of reference of the Audit Committee include the following:

Powers of the Audit Committee

● Investigate any activity within its terms of reference;

● Seek information from any employee;

● Obtain outside legal or other professional advice;

● Secure attendance of external resources with relevant expertise, if considered necessary;


Role of the Audit Committee inter alia, includes the following:

● Overseeing the Company's financial reporting process and the disclosure of its financialinformation to ensure that the financial statement is correct, sufficient and credible;

● Recommending to the Board, the appointment, re-appointment and, if required, the replacementor removal of statutory auditors, including cost auditors, and fixation of audit fees and otherterms of appointment;

● Approving payment to statutory auditors, including cost auditors for any other services renderedby them;

● Reviewing with the management, annual financial statements and auditors’ report thereonbefore submission to the Board for approval, with particular reference to:

❒ Matters required to be included in the Directors' Responsibility Statement in the Directors'Report in terms of the Companies Act;

❒ Changes, if any, in accounting policies and practices and reasons for the same;

❒ Major accounting entries involving estimates based on the exercise of judgment by themanagement;

❒ Significant adjustments made in financial statements arising out of audit findings;

❒ Compliance with listing and other legal requirements relating to financial statements;

❒ Disclosure of related party transactions;

❒ Qualifications in draft audit report;

● Reviewing with the management the quarterly financial statements before submission to theBoard for approval;

● Reviewing with the management, the statement of uses/application of funds raised through anissue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised forpurposes other than those stated in the offer document/prospectus/notice, and the reportsubmitted by the monitoring agency monitoring the utilisation of proceeds of a public or rightsissue, and making appropriate recommendations to the Board to take up steps in this matter;

● Reviewing and monitoring the auditors’ independence and performance and effectiveness ofaudit process;

● Approving or any subsequent modification of transactions of the Company with related parties;

● Scrutiny of inter-corporate loans and investments;

● Valuation of undertakings or assets of the Company, wherever it is necessary;

● Evaluating of internal financial controls and risk management systems;

● Reviewing with the management, the performance of statutory auditors, including cost auditorsand internal auditors, adequacy of internal control systems;

● Reviewing the adequacy of internal audit function, if any, including the structure of the internalaudit department, staffing and seniority of the official heading the department, reporting structure,coverage and frequency of internal audit;

● Discussing with internal auditors, any significant findings and follow-up thereon;

● Reviewing the findings of any internal investigations by the internal auditors into matterswhere there is suspected fraud or irregularity or a failure of internal control systems of amaterial nature, and reporting the matter to the Board;

● Discussing with statutory auditors, before the audit commences, about the nature and scope ofaudit as well as post audit discussion to ascertain any area of concern;

● Examining the reasons for substantial defaults, if any, in the payment to depositors, debentureholders, shareholders (in case of non-payment of declared dividends) and creditors;


● Reviewing the functioning of the Whistle Blower mechanism;

● Approving the appointment of the CFO (i.e. the whole-time Finance Director or any other personheading the finance function or discharging that function) after assessing the qualifications,experience and background of the candidate;

● Carrying out such other functions as may be specifically referred to the Committee by theCompany's Board of Directors and/or other Committees of Directors;

● Reviewing financial statements, in particular the investments made by the Company's unlistedsubsidiaries;

● Reviewing the following information:

❒ Management Discussion and Analysis of financial condition and results of operations;

❒ Statement of significant related party transactions (as defined by the Audit Committee)submitted by management;

❒ Management letters/letters of internal control weaknesses issued by the statutory auditors;

❒ Internal audit reports relating to internal control weaknesses; and

❒ Appointment, removal and terms of remuneration of internal auditors/chief internal auditor;

● Seeking comments of the auditors about internal control systems, the scope of audit, includingthe observations of the auditors and review of financial statement before their submission tothe Board and to discuss any related issue with the internal and statutory auditors and themanagement of the Company.

1 As revised by the Board in its meeting held on May 29, 2014 in conformity with the revised Clause49 of the Listing Agreement.

Executives of the accounts department, finance department, corporate secretarial department andinternal audit cell and representatives of statutory and internal auditors attend the Audit CommitteeMeetings. The cost auditors attend the Audit Committee Meeting when cost audit reports are discussed.

During the year, the Committee has reviewed the internal controls put in place to ensure thataccounts of the Company are properly maintained and that the accounting transactions are inaccordance with prevailing laws and regulations. In conducting such reviews, the committee foundno discrepancy or weakness in the internal control system of the Company.

4. Nomination and Remuneration Committee1

I. COMPOSITION

The Committee comprises of three independent directors. The Committee met once during the yearon May 13, 2013 and the attendance of the Members at the meeting was as follows:

Name of Member Status Meeting attended

Shri P. Vaman Rao Chairman 1

Shri Laxminiwas Sharma Member 1

Ms. Poonam Bodra1 Member –

Shri Sudhir Jalan2 Member –

Shri Rakesh Bhartia2 Member –

1 Ms. Poonam Bodra was appointed as member of the Committee with effect from February 13, 2014.

2 Shri Sudhir Jalan and Shri Rakesh Bhartia resigned with effect from December 11, 2013 and February 10,

2014 respectively.


II. TERMS OF REFERENCE1

● Identify persons who are qualified to become Directors and who may be appointed in seniormanagement in accordance with the criteria laid down and to recommend to the Board theirappointment and/or removal;

● Carry out evaluation of every Director's performance;

● Formulate the criteria for determining qualifications, positive attributes and independence of aDirector, and recommend to the Board a policy, relating to the remuneration for the Directors,key managerial personnel and other employees;

● Formulate the criteria for evaluation of Independent Directors and the Board;

● Devise a policy on Board diversity;

● Recommend/review remuneration of the Managing Director(s) and Whole-time Director(s) basedon their performance and defined assessment criteria;

● Carry out any other function as is mandated by the Board from time to time and/or enforced byany statutory notification, amendment or modification, as may be applicable;

● Perform such other functions as may be necessary or appropriate for the performance of itsduties.

1 The Board in its meeting held on May 29, 2014 re-named the Committee and revised the terms ofreference in conformity with the revised Clause 49 of the Listing Agreement.

III. REMUNERATION POLICY

Remuneration of employees largely consists of base remuneration, perquisites and performanceincentive, which vary for cadres and are governed by industry pattern, qualification and experienceof the employee, responsibilities handled and individual performance etc. The committee whileapproving the remuneration of managerial personnel takes into account the financial position of thecompany and trend in the industry.

IV. DETAILS OF DIRECTORS' REMUNERATION PAID FOR THE YEAR 2013-14:

a. Executive Directors (`)

Salary, Employers'Name & perquisites & contribution RetirementDesignation allowances to provident Total benefits

fund/super-annuation fund

Shri Devashish Poddar, 57,48,800 9,63,360 67,12,160 As per(Vice-Chairman & Company'sManaging Director) rules

Shri Rameshwar Lall 46,61,566 – 46,61,566 As perLakhotia 46,46,900 – 46,46,900 Company's(Executive Director) rules

Notes:

As the provision for gratuity, leave encashment and long service award is made on an actuarialbasis for the Company as a whole, the amount pertaining to managerial personnel is not includedabove.

- Notice period for termination of appointment of managing director is three months andwhole-time director is one month, from either side.

- No severance pay is payable on termination of appointment of managing/whole-time directors.

- No stock option has been given.


(`)b. Non-Executive Directors

Name of Directors Sitting fees

Shri Ranjan Kumar Poddar 30,000

Shri Sudhir Jalan –

Shri Laxminiwas Sharma 60,000

Shri P. Vaman Rao 56,000

Shri Rakesh Bhartia –

Shri G.S. Srinivasan, IDBI Nominee1 56,000

Ms. Poonam Bodra2 30,000

1 Sitting fee was remitted to IDBI Bank Limited as per terms of appointment of nomineedirector.

2 Sitting fee was remitted to LIC of India as per terms of appointment of director.

No remuneration except sitting fees for attending board/committee meetings was paid to anynon-executive directors.

5. Stakeholders Relationship Committee1

The Committee comprises of two executive directors and two non-executive directors as on March 31,2014. Shareholders' complaints/grievances are redressed by the Registrar and Transfer Agent, viz.Venture Capital and Corporate Investments Private Limited.

During the year, the Company has not received any investors' complaints. Hence, no meeting of theStakeholders Relationship Committee was held.

TERMS OF REFERENCE1

The functioning and broad terms of reference of the Stakeholders Relationship Committee as adopted bythe Board are as under:

● Monitor redressal of investors'/shareholders'/security holders' grievances;

● Oversee the performance of the Company's Registrar and Transfer Agent;

● Recommend methods to upgrade the standard of services to investors;

● Monitor implementation of the Company's Code of Conduct for prohibition of insider trading;

● Carry out any other function as is referred by the Board from time to time or enforced by anystatutory notification/amendment or modification as may be applicable.

a. Examine redressal of shareholders' and investors' complaints such as transfer of shares,non-receipt of balance sheet, non-receipt of declared dividend etc.

b. Do all other acts or deeds as may be necessary or incidental thereto. The main objective of theCommittee is to strengthen the investor relations.

1 The Board in its meeting held on May 29, 2014 re-named the Committee and revised the terms ofreference in conformity with the revised Clause 49 of the Listing Agreement.

The Company Secretary and the Compliance Officer are entrusted with the responsibility to specificallylook into the redressal of the shareholders' complaints and report the same to the Committee.

During the year, no complaints were received from the shareholders.

As on August 11, 2014 no requests involving transfer of shares are pending for processing.

In order to expedite the process of share transfers, the Board has delegated the powers of approvingtransfer of shares to the Company Secretary and Senior Manager (Legal). The delegated authority isattending to share transfer formalities within the stipulated time. All valid share transfers during theyear ended March 31, 2014 have been acted upon. The Company had no complaints pending at the closeof the financial year.


6. General Body Meetings

a. Last three Annual General Meetings of the Company were held as under:

Year Date Day Time Venue

2012-13 September 30, Monday 10.45 a.m. Bhaskara Auditorium,2013 B.M. Birla Science Centre,

Adarshnagar, Hyderabad

2011-12 September 28, Friday 3.00 p.m. Bhaskara Auditorium,2012 B.M. Birla Science Centre,


2010-11 September 29, Thursday 11.00 a.m. Bhaskara Auditorium,2011 B.M. Birla Science Centre,


b. The following Special Resolutions were passed at the last three annual general meetings:

i. Re-appointment of M/s. Deloitte Haskins & Sells as Auditors.

ii. Appointment of Shri Devashish Poddar as Vice-Chairman & Managing Director for a period oftwo years (from August 1, 2011 to July 31, 2013) and fixing his remuneration.

iii. Appointment of Shri Rameshwer Lall Lakhotia as Executive Director of the Company for aperiod of two years (from July 24, 2012 to July 23, 2014).

iv. Appointment of Shri Devashish Poddar as Vice-Chairman & Managing Director for a period oftwo years (from August 1, 2013 to July 31, 2015) and fixing his remuneration.

v. Amendments in the Articles of Association of the Company.

vi. Report under Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985.

c. During 2013-14, no resolutions were passed through postal ballot as per the Companies (Passing ofResolution by Postal Ballot) Rules, 2011.

7. a. Code of Conduct

The Board of Directors has adopted the Code of Business Conduct and Ethics for Directors andsenior management.

A copy of the Code has been put on the Company's website www.sirpurpaper.com. The code has beencirculated to all the Directors and senior management personnel and the compliance of the same isaffirmed by them annually.

A declaration signed by the Executive Director of the Company is annexed.

b. Whistle Blower Policy

The Company has established a vigil mechanism for the Directors and employees in compliance withrevised Clause 49 of the Listing Agreement and Section 177 (9) of the Companies Act, 2013 readwith Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014. As required, theWhistle Blower Policy has been posted on the Company's website.

8. Disclosures

a. During the year, there were no transactions with the promoters, directors or the management ortheir relatives that had potential conflict with the interest of the Company. The Company has nosubsidiaries.

Transactions with related parties as per requirements of Accounting Standard (AS-18) - 'RelatedParty Disclosures' are disclosed in Note No.28(l) of the financial statements in the Annual Report.

b. In the preparation of the financial statements, the Company has followed the Accounting Standardsas prescribed by Companies (Accounting Standards) Rules, 2006. The significant accounting policies,which are consistently applied, are disclosed in Note No.1.2 of the financial statements in theAnnual Report.


c. The Company has laid down procedures to inform the Board about the risk assessment andminimization. The Board periodically discusses the significant business risks identified by themanagement and the mitigation measures to address such risks.

d. There were no instances of non-compliance by the Company on any matter related to the capitalmarkets, during the last three years and no strictures or penalties have been imposed on theCompany by the stock exchange or by any statutory authority.

e. The Executive Director and the Chief Financial Officer of the Company have issued necessarycertificate pursuant to Clause 49 of the Listing Agreement and the same is attached and forms partof the annual report.

9. Means of Communication

a. Quarterly results and statutory notices are published in prominent daily newspapers viz. FinancialExpress and Andhra Prabha.

b. Share holding pattern, quarterly results and annual report are sent to the stock exchanges, wheresecurities of the Company are listed, within the stipulated time. These are provided on the Company'swebsite www.sirpurpaper.com and furnished to the website www.corpfiling.co.in.

c. Separate Email ID for registering investors grievances is [email protected].

d. Management discussion and analysis report forms part of the annual report, which is mailedindividually to the Members of the Company.

10. General Shareholders' information

a. Annual General Meeting will be held on Monday, September 29, 2014 at 12:30 p.m. at 'BhaskaraAuditorium', B. M. Birla Science Center, Adarshnagar, Hyderabad - 500 063.

b. E-voting services:

In compliance with the provisions of Section 108 of the Companies Act, 2013 and Rule 20 of theCompanies (Management and Administration) Rules, 2014 read with Clause 35B of the ListingAgreement, the Company is pleased to provide to the Members the facility to exercise their right tovote on all resolutions set forth in the Notice to the Members, convening the 75th Annual GeneralMeeting by electronic means and the business will be transacted through E-voting service providedby National Securities Depository Limited. The detailed instructions for E-voting are given as aseparate attachment to the said Notice.

c. Financial calendar:

Financial year: April 1 to March 31

Financial reporting for the quarterly results: (Tentative)

First quarter ending June 30 on or before August 14

Second quarter ending September 30 on or before November 14

Third quarter ending December 31 on or before February 14

Quarter/year ending March 31 on or before May 30

Annual General Meeting on or before September 30

d. Dates of book closure: September 25, 2014 to September 29, 2014(both days inclusive)

e. Listing on stock exchanges: BSE Limited, Mumbai (BSE)National Stock Exchange of India Limited (NSE)

Annual listing fees for the year 2014-15 has been paid to the above stock exchanges.

f. Stock codes, demat ISIN & CIN

BSE Limited 502455

National Stock Exchange of India Limited SIRPAPER EQ

ISIN No. on NSDL & CDSL INE202C01010

CIN L21010TG1938PLC000591


g. In terms of the CDR scheme and the Master Restructuring Agreement entered with the lenders, theCompany has made a preferential issue of 11,05,100 Ordinary shares of `10 each at a price of `43per share (including premium of `33 per share) aggregating `4.75 crore, to be offered and allottedin two tranches. Accordingly, the Company has offered and allotted 5,55,100 Ordinary shares infirst tranche to M/s. Amba Investment Private Limited, a promoter on January 31, 2013. Thebalance 5,50,000 ordinary shares have also been allotted to the said promoter in second tranche inpursuance of CDR scheme on August 14, 2013. The said Ordinary shares are listed on BSE and NSE.The 5,50,000 Ordinary shares (equity) issued shall bear a lock-in of one year, from the date ofallotment (i.e. August 14, 2013) till August 14, 2014.

h. Stock market price data for the year 2013-14

i. Share price on BSE & NSE

Month BSE NSE

High (`) Low (`) High (`) Low (`)

2013 April 28.00 24.00 28.00 25.00

May 27.75 24.00 27.80 25.75

June 25.75 22.00 26.00 19.65

July 24.65 20.80 23.10 19.35

August 21.85 17.90 – –

September 19.90 17.55 – –

October 20.90 18.00 – –

November 20.45 16.85 – –

December 18.75 14.55 – –

2014 January 16.50 13.20 15.45 13.30

February 15.75 13.32 16.25 13.75

March 15.22 13.02 15.15 12.65

ii. BSE SENSEX

Month Open High Low Close

2013 April 18890.81 19622.68 18144.22 19504.18

May 19459.33 20443.62 19451.26 19760.30

June 19859.22 19860.19 18467.16 19395.81

July 19352.48 20351.06 19126.82 19345.70

August 19443.29 19569.20 17448.71 18619.72

September 18691.83 20739.69 18166.17 19379.77

October 19452.05 21205.44 19264.72 21164.52

November 21158.81 21321.53 20137.67 20791.93

December 20771.27 21483.74 20568.70 21170.68

2014 January 21222.19 21409.66 20343.78 20513.85

February 20479.03 21140.51 19963.12 21120.12

March 21079.27 22467.21 20920.98 22386.27

i. Share Transfer System

The Company's shares are traded in the stock exchanges compulsorily in demat mode. The Companyhas appointed a Registrar and Transfer Agent as a common agency to look after both physical anddemat share work. The shares, which are lodged for transfer with the Registrars and TransferAgent, are processed and returned to Members within stipulated time. The address of the Registrarand Transfer Agent for correspondence is as follows:


Venture Capital and Corporate Investments Private LimitedUnit: The Sirpur Paper Mills Limited12-10-167, Bharat NagarHyderabad 500 018Tel.: +91 40 2381 8475/2381 8476Fax: +91 40 2386 8024Email: [email protected]

j. a. Distribution of shareholding as on March 31, 2014

Number of ordinary Number of shareholders Shareholding

shares held Nos. % Nos. %

1 to 500 7,652 85.28 10,52,083 6.19

501 to 1000 613 6.83 4,87,881 2.87

1001 to 2000 303 3.38 4,50,436 2.66

2001 to 3000 108 1.20 2,67,768 1.58

3001 to 4000 52 0.58 1,87,107 1.10

4001 to 5000 53 0.59 2,40,284 1.41

5001 to 10000 79 0.88 5,75,130 3.39

10001 and above 112 1.26 1,37,24,311 80.80

TOTAL 8,972 100.00 1,69,85,000 100.00

b. Categories of shareholders as on March 31, 2014

Category Number of % Number of %shares held shareholders

Promoters & persons acting in concert 84,77,474 49.91 6 0.07

Public financial institutions, insurancecompanies & government companies 18,78,047 11.06 6 0.07

Banks and mutual funds 5,076 0.03 23 0.26

Non-resident individuals 71,539 0.42 63 0.70

Other bodies corporate 13,07,903 7.70 258 2.87

Others 52,44,961 30.88 8,616 96.03

TOTAL 1,69,85,000 100.00 8,972 100.00

11. Dematerialisation of shares and liquidity

Trading in Company's shares is permitted only in dematerialized form and 1,60,81,014 Ordinary shares(representing 94.68% of the Company's share capital) have been dematerialised upto March 31, 2014.

12. Books of Account: The Books of Account of the Company with respect of items mentioned in Clause (a)to (d) of sub-section (1) of Section 209 of the Companies Act, 1956 are kept at the Mills Office at factory.

13. The addresses for correspondence are as mentioned below:

Registered Office Factory Location

The Sirpur Paper Mills Limited Sirpur - Kaghaznagar - 504 2965-9-22/1/1, 1st Floor Adilabad DistrictAshoka Chambers, Opp: New MLA Quarters TelanganaAdarshnagar, Hyderabad - 500 063Tel.: +91 40 2323 6301/2329 8705Fax: +91 40 2329 8705Email: [email protected]


Declaration

As provided under Clause 49 of the Listing Agreement with the stock exchanges, I affirm that the Board

members and the senior management personnel have confirmed compliance with the Code of Conduct, as

applicable to them, for the year ended March 31, 2014.

For The Sirpur Paper Mills Limited

Hyderabad, Rameshwar Lall LakhotiaAugust 11, 2014 Executive Director

TO THE MEMBERS OF

THE SIRPUR PAPER MILLS LIMITED

We have examined the compliance of conditions of

Corporate Governance by The Sirpur Paper Mills

Limited, for the year ended March 31, 2014, as

stipulated in Clause 49 of the Listing Agreement of

the said Company with stock exchanges.

The Compliance of conditions of Corporate

Governance is the responsibility of the management.

Our examinations has been limited to a review of

the procedures and implementation thereof adopted

by the Company for ensuring compliance with the

conditions of Corporate Governance as stipulated in

the said Clause. It is neither an audit nor an

expression of opinion on the financial statement of

the Company.

In our opinion and to the best of our information

and according to the explanations given to us and

representations made by the Directors and the

management, we certify that the Company has

complied with the conditions of the Corporate

Governance as stipulated in Clause 49 of the above

mentioned Listing Agreement.

We state that the Stakeholders Relationship

Committee (formerly Shareholders Grievances

Committee) has maintained records to show the

investor grievance and certify that as at March 31,

2014 there were no investor grievances remaining

unattended/pending for more than 30 days.

We further state that such compliance is neither an

assurance as to the future viability of the Company

nor of the efficiency or effectiveness with which the

management has conducted the affairs of the

Company.

For A. J. Sharma & AssociatesCompany Secretaries

A. J. SharmaMembership No. CP-2176, FCS-2120

Hyderabad,

August 11, 2014

Compliance certificate on Corporate Governance

14. Non-mandatory requirements

a. At present, the Chairman does not have any separate office with the Company. The Corporate Officeof the Company supports the Chairman for discharging the responsibilities.

b. As the financial performance of the Company is well publicised, individual communication ofhalf-yearly results is not sent to the Members.


CEO and CFO Certificate

The Board of Directors of


a. We have reviewed the financial statements and the cash flow statement of the Sirpur Paper

Mills Limited (the company) for the year ended March 31, 2014 and to the best of our

knowledge and belief:

i. these statements do not contain any materially untrue statement or omit any material

fact or contain statements that might be misleading;

ii. these statements together present a true and fair view of the Company's affairs and

are in compliance with the existing accounting standards, applicable laws and regulations.

b. There are, to the best of our knowledge and belief, no transactions entered into by the

Company during the year, which are fraudulent, illegal or violative of the Company's code

of conduct.

c. We accept responsibility for establishing and maintaining internal controls for financial

reporting and we have evaluated the effectiveness of internal control systems of the Company

pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee,

significant deficiencies in the design or operation of internal controls, if any, of which we are

aware and the steps taken or proposed to be taken to rectify these deficiencies.

d. We have indicated to the auditors and the Audit Committee:

i. significant changes in internal control over financial reporting during the year;

ii. significant changes in accounting policies during the year, if any, and that the same

have been disclosed in the notes to the financial statements; and

iii. instances of significant fraud of which we have become aware and the involvement

therein, if any, of the management or any employee having a significant role in the

Company's internal control system over financial reporting.

Hyderabad, Rameshwar Lall Lakhotia Vimal AroraMay 29, 2014 Executive Director Chief Financial Officer


TO THE MEMBERS OF

THE SIRPUR PAPER MILLS LIMITED

Report on the Financial Statements

We have audited the accompanying financial

statements of THE SIRPUR PAPER MILLS LIMITED

("the Company"), which comprise the Balance Sheet

as at March 31, 2014, the Statement of Profit and

Loss and the Cash Flow Statement for the year then

ended, and a summary of the significant accounting

policies and other explanatory information

Management's Responsibility for the Financial

Statements

The Company's management is responsible for the

preparation of these financial statements that give

a true and fair view of the financial position, financial

performance and cash flows of the Company in

accordance with the Accounting Standards notified

under the Companies Act, 1956 ("the Act") (which

continue to be applicable in respect of Section 133

of the Companies Act, 2013 in terms of General

Circular 15/2013 dated September 13, 2013 of the

Ministry of Corporate Affairs) and in accordance

with the accounting principles generally accepted in

India. This responsibility includes the design,

implementation and maintenance of internal control

relevant to the preparation and presentation of the

financial statements that give a true and fair view

and are free from material misstatement, whether

due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these

financial statements based on our audit. We

conducted our audit in accordance with the Standards

on Auditing issued by the Institute of Chartered

Accountants of India. Those Standards require that

we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance


about whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain

audit evidence about the amounts and the disclosures

in the financial statements. The procedures selected

depend on the auditor's judgment, including the

assessment of the risks of material misstatement of

the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor

considers internal control relevant to the Company's

preparation and fair presentation of the financial

statements in order to design audit procedures that

are appropriate in the circumstances, but not for

the purpose of expressing an opinion on the

effectiveness of the Company's internal control. An

audit also includes evaluating the appropriateness

of the accounting policies used and the

reasonableness of the accounting estimates made

by the management, as well as evaluating the overall

presentation of the financial statements.

We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for

our audit opinion.

Opinion

In our opinion and to the best of our information

and according to the explanations given to us, the

aforesaid financial statements give the information

required by the Act in the manner so required and

give a true and fair view in conformity with the

accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of

affairs of the Company as at March 31, 2014;

b. in the case of the Statement of Profit and Loss,

of the loss of the Company for the year ended

on that date; and

c. in the case of the Cash Flow Statement, of the

cash flows of the Company for the year ended

on that date.


Emphasis of Matter

We draw attention to Note 28 (o) to the Statement

which indicates that as at March 31, 2014 the

accumulated losses amounted to `20,361.30 lakhs

has eroded the net worth of the Company and the

Company has intimated to the Board for Industrial

and Financial Reconstruction (BIFR), under Section

23 of Sick Industrial Companies (Special Provision)

Act, 1985, indicating the existence of a material

uncertainty about the Company's ability to continue

as a going concern. These financial results have been

prepared on a going concern basis for the reasons

stated in the said Note. Our report is not qualified in

respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report)

Order, 2003 ("the Order") issued by the Central

Government in terms of Section 227(4A) of the

Act, we give in the Annexure a statement on

the matters specified in paragraphs 4 and 5 of

the Order.

2. As required by Section 227(3) of the Act, we

report that:

a. We have obtained all the information and

explanations which to the best of our

knowledge and belief were necessary for the

purposes of our audit.

b. In our opinion, proper books of account as

required by law have been kept by the

Company so far as it appears from our

examination of those books.

c. The Balance Sheet, the Statement of Profit

and Loss, and the Cash Flow Statement dealt

with by this Report are in agreement with

the books of account.

d. In our opinion, the Balance Sheet, the

Statement of Profit and Loss and the Cash

Flow Statement comply with the Accounting

Standards notified under the Act (which

continue to be applicable in respect of

Section 133 of the Companies Act, 2013 in

terms of General Circular 15/2013 dated

September 13, 2013 of the Ministry of

Corporate Affairs).

e. On the basis of the written representations

received from the Directors as on

March 31, 2014 taken on record by the

Board of Directors, none of the Directors is

disqualified as on March 31, 2014 from

being appointed as a director in terms of

Section 274(1)(g) of the Act.

For Deloitte Haskins & SellsChartered Accountants

(Registration No.008072S)

Ganesh BalakrishnanSecunderabad, PartnerMay 29, 2014 (Membership No.201193)


i. Having regard to the nature of the Company'sbusiness/activities during the year, clauses (vi),(xii), (xiii), (xiv), (xix) and (xx) of paragraph4 of the Order are not applicable to the Company.

ii. In respect of its fixed assets:

a. The Company has maintained properrecords showing full particulars, includingquantitative details and situation of fixedassets. Plant and machinery include ̀ 387.26lakhs being cost allocated on the basis oftechnical estimates to assets installed priorto 1961-62.

b. The fixed assets were physically verifiedduring the year by the management inaccordance with a regular programme ofverification which, in our opinion, providesfor physical verification of all the fixedassets at reasonable intervals. According tothe information and explanation given tous, no material discrepancies were noticedon such verification.

c. The fixed assets disposed off during the year,in our opinion, do not constitute asubstantial part of the fixed assets of theCompany and such disposal has, in ouropinion, not affected the going concernstatus of the Company.

iii. In respect of its inventory:

a. As explained to us, the inventories werephysically verified during the year by themanagement at reasonable intervals.

b. In our opinion and according to theinformation and explanation given to us,the procedures of physical verification ofinventories followed by the managementwere reasonable and adequate in relationto the size of the Company and the natureof its business.

c. In our opinion and according to theinformation and explanations given to us,the Company has maintained proper recordsof its inventories and no materialdiscrepancies were noticed on physicalverification.

iv. The Company has neither granted nor taken anyloans, secured or unsecured, to/from companies,

ANNEXURE TO THE AUDITORS' REPORT(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'

section of our report of even date)

firms or other parties covered in the Registermaintained under Section 301 of the CompaniesAct, 1956.

v. In our opinion and according to the informationand explanations given to us, there is anadequate internal control system commensuratewith the size of the Company and the nature ofits business for the purchase of inventory andfixed assets and for the sale of goods and duringthe course of our audit we have not observedany continuing failure to correct majorweaknesses in such internal control system.

vi. In respect of contracts or arrangements enteredin the Register maintained in pursuance of Section301 of the Companies Act, 1956, to the best ofour knowledge and belief and according to theinformation and explanations given to us:

a. The particulars of contracts orarrangements referred to Section 301 thatneeded to be entered in the Registermaintained under the said Section have beenso entered.

b. Where each of such transaction is in excessof `5 lakhs in respect of any party, thetransactions have been made at prices whichare prima facie reasonable having regardto the prevailing market prices at therelevant time.

vii. In our opinion, the Company has an adequateinternal audit system commensurate with thesize and the nature of its business.

viii. We have broadly reviewed the cost recordsmaintained by the Company pursuant to theCompanies (Cost Accounting Records) Rules,2011 prescribed by the Central Governmentunder Section 209(1) (d) of the Companies Act,1956 and are of the opinion that, prima facie,the prescribed cost records have been made andmaintained. We have, however, not made adetailed examination of the cost records with aview to determine whether they are accurateor complete.

ix. According to the information and explanationsgiven to us in respect of statutory dues:

a. Except certain delays in depositing ofemployee state insurance, the Company hasgenerally been regular in depositing


undisputed dues, including provident fund,Investor Education and Protection Fund,income tax, sales tax, wealth tax, servicetax, custom duty, excise duty, cess and othermaterial statutory dues applicable to it withthe appropriate authorities.

b. There were no undisputed amounts payablein respect of provident fund, InvestorEducation and Protection Fund, employees'state insurance, income tax, wealth tax,

service tax, custom duty, excise duty, cessand other material statutory dues in arrearsas at March 31, 2014 for a period of morethan six months from the date they becamepayable.

c. Details of dues of income tax, sales tax,wealth tax, service tax, custom duty, exciseduty and cess which have not been depositedas on March 31, 2014 on account of disputesare given below:

x. The accumulated losses of the Company at theend of the financial year are not less than fiftypercent of its net worth and the Company hasincurred cash losses during the financial yearcovered by our audit and in the immediatelypreceding financial year.

xi. In our opinion and according to the informationand explanations given to us, the Company hasdefaulted in the repayment of dues to banks,financial institutions as per details below.

Particulars As at March 31, 2014

Period of ` Lakhsdefault

Term loans from bank

- Principal 1 day 4,35.73

- Interest 31-60 days 5,50.52

xii. According to the information and explanationsgiven to us, the Company has not givenguarantee for any loans taken by others frombanks or financial institutions

xiii. In our opinion and according to the informationand explanations given to us, the term loanshave been applied by the Company during theyear for the purposes for which they wereobtained.

xiv. In our opinion and according to the informationand explanations given to us and on an overallexamination of the Balance Sheet of theCompany, we report that funds raised on short-term basis aggregating approximately ̀ 14,49.68lakhs have been used for long-term investment.

xv. According to the information and explanationsgiven to us, the Company has made preferentialallotment of shares to parties and companiescovered in the Register maintained under Section301 of the Companies Act, 1956 at price which,in our opinion, is prima facie not prejudicial tointerest of the Company.

xvi. To the best of our knowledge and according tothe information and explanations given to us,no fraud by the Company and no fraud on theCompany has been noticed or reported duringthe year.

For Deloitte Haskins & SellsChartered Accountants

(Registration No.008072S)

Ganesh BalakrishnanSecunderabad, PartnerMay 29, 2014 (Membership No.201193)

Name of the statute Nature of dues Forum where Period to which ` Lakhsdispute is pending the amount relates

Central Excise MODVAT CESTAT 2000-07 36.51

Excise duty CESTAT 2002-09 2,02.77

Service tax CESTAT 2005-08 9,70.45

Excise duty AP High Court 2006-07 1,84.26

Value Added Tax Value Added Tax Sales Tax Appellate 2005-11 6,68.68

Tribunal

Value Added Tax Appellate Deputy 2008-09 58.94

Commissioner

Value Added Tax AP High Court 2005-10 2,11.37


` Lakhs

Particulars Note As at As atMarch 31, 2014 March 31, 2013

EQUITY AND LIABILITIESShareholders' fundsShare capital 2 16,99.36 16,44.36Reserves and surplus 3 (2,68.56) 88,52.00

14,30.80 104,96.36Non-current liabilitiesLong-term borrowings 4 315,15.52 308,45.89Deferred tax liabilities (Net) 5 – –Other long-term liabilities 6 39,57.26 40,61.56Long-term provisions 7 8,68.47 8,64.97

363,41.25 357,72.42Current liabilitiesShort-term borrowings 8 38,18.95 34,74.41Trade payables 9 94,69.86 80,39.94Other current liabilities 10 52,13.75 15,80.15Short-term provisions 11 1,84.78 1,76.76

186,87.34 132,71.26TOTAL 564,59.39 595,40.04

ASSETSNon-current assetsFixed assets

Tangible assets 12 398,79.81 417,98.46Intangible assets 12 14.20 22.04Capital work-in-progress – 9,36.21

398,94.01 427,56.71Non-current investments 13 – –Long-term loans and advances 14 21,45.54 21,35.55

420,39.55 448,92.26Current assetsInventories 15 46,11.65 40,95.56Trade receivables 16 60,07.56 63,41.62Cash and bank balances 17 1,48.90 3,69.77Short-term loans and advances 18 23,07.19 26,18.00Other current assets 19 13,44.54 12,22.83

144,19.84 146,47.78TOTAL 564,59.39 595,40.04

See accompanying notes forming part of financial statements.

In terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & SellsChartered Accountants

Ranjan Kumar Poddar Devashish PoddarGanesh Balakrishnan Vimal Arora Chairman Vice-Chairman &Partner Chief Financial Officer Managing Director

Secunderabad Dinesh Lata Rameshwar Lall LakhotiaMay 29, 2014 Company Secretary Executive Director

Balance Sheet as at March 31, 2014


` Lakhs

Particulars Note For the year ended For the year endedMarch 31, 2014 March 31, 2013

GROSS INCOME

Gross revenue from operations 20 444,34.33 372,44.31

Less: Excise duty 26,79.38 22,51.35

Net revenue from operations 417,54.95 349,92.96

Other operating revenue 21 2,93.62 4,07.60

Total revenue from operations 420,48.57 354,00.56

Other income 22 10,10.24 11,19.61

Total revenue 430,58.81 365,20.17

EXPENSES

Cost of materials consumed 23 243,27.89 172,35.57

Changes in inventories of finished goods andstock-in-process 24 (15,00.41) 1,50.38

Employee benefits expense 25 69,62.84 67,10.31

Finance costs 26 48,22.46 44,87.79

Depreciation and amortisation expense 30,88.11 30,90.70

Less: Transfer from revaluation reserve 2,03.91 1,63.70

28,84.20 29,27.00

Other expenses 27 146,59.98 152,78.42

Total expenses 521,56.96 467,89.47

LOSS BEFORE TAX (90,98.15) (102,69.30)

Tax expenses

Deferred tax expense/(credit) – (5,59.48)

LOSS FOR THE YEAR (90,98.15) (97,09.82)

Loss per share (Face value of `10 each) 28(n)

Basic and diluted (`) (54.22) (60.80)


Statement of Profit and Loss for the year ended March 31, 2014





` Lakhs

Particulars For the year ended For the year endedMarch 31, 2014 March 31, 2013

A. CASH FLOW FROM OPERATING ACTIVITIES

Loss before tax (90,98.15) (102,69.30)

Adjustments for

Depreciation 28,84.20 29,27.00

Loss on fixed assets retired from active use – 3,43.95

(Profit)/loss on sale of fixed assets (3.69) (91.95)

(Profit)/loss on sale of current investments – (42.61)

Interest income (6,63.79) (8,54.23)

Interest on borrowings 47,56.05 69,72.77 43,85.52 66,67.68

Operating loss before working capital changes (21,25.38) (36,01.62)

Changes in working capital

Adjustments for

Loans and advances 1,67.36 3,62.75

Trade and other receivables 3,34.06 (93.15)

Inventories (5,16.09) 5,25.39

Trade payables and other liabilities 20,54.45 20,39.78 17,68.63 25,63.62

Cash used in operations (85.60) (10,38.00)

Net income tax (paid)/refund (39.45) 1,60.35

Net cash used in operating activities (A) (1,25.05) (8,77.65)

B. CASH FLOW FROM INVESTING ACTIVITIES

Capital expenditure on fixed assets (including capital advances) (1,75.24) (6,47.22)

Proceeds from sale of fixed assets 11.02 1,23.13

Purchase of current investments – (14,50.00)

Proceeds from sale of current investments – 14,92.61

Net cash used in investing activities (B) (1,64.22) (4,81.48)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of Ordinary shares (including securities premium) 2,36.50 2,38.69

Proceeds from borrowings 30,57.47 48,73.72

Repayment of borrowings (3.31) (2.99)

Interest paid (38,79.74) (46,51.80)

Interest received on deposits with banks, suppliers and others 6,52.53 8,78.44

Net cash from financing activities (C) 63.45 13,36.06

Net decrease in cash and cash equivalents (A+B+C) (2,25.82) (23.07)

Cash and cash equivalents at beginning of the year 2,89.47 3,12.54

Cash and cash equivalents at the end of the year (Refer Note 17A) 63.65 2,89.47

Cash Flow Statement for the year ended March 31, 2014

(Contd.)


` Lakhs


Notes:

1. Cash Flow Statement has been prepared under the indirectmethod as set out in the Accounting Standard 3on Cash Flow Statement.

2. Reconcilation of cash and cash equivalents at the end ofthe year with cash and bank balance as per Note 17:Cash and bank balance as per Note 17 1,48.90 3,69.77

Less: Balances with earmarked accounts

- unpaid dividend account 11.53 16.67

- balances held as margin money deposit 72.41 62.31

- in redemption account 1.31 1.32

Cash and cash equivalents at the end of the year 63.65 2,89.47


Cash Flow Statement (Contd.)





1.1 Corporate information

Incorporated in 1938, the Sirpur Paper Mills Limited is a

manufacturer of paper and paper board in India, and its

fully integrated pulp and paper mill and captive power plant

is located at Sirpur Kaghaznagar, Andhra Pradesh, India. Its

production commenced in 1942 with a capacity of 5,000

TPA. The present installed capacity of the mill is 138,300

TPA.

1.2 Significant accounting policies

a. Accounting concepts

The financial statements are prepared under the

historical cost convention except for certain fixed

assets which has been revalued, in accordance with

the generally accepted accounting principles in India

and in accordance with accounting standards as notified

by Companies (Accounting Standards) Rules, 2006.

b. Use of estimates

The preparation of financial statements requires

estimates and assumptions to be made that affect the

reported amount of assets and liabilities on the date

of the financial statements and the reported amount

of revenues and expenses during the reporting period.

Difference between the actual results and estimates

are recognised in the period in which the results are

known/materialised.

c. Fixed assets

Fixed assets are valued at revalued cost less

depreciation, pre-operative expenses including trial run

expenses (net of revenue) are capitalised. Borrowing

costs during the period of construction is added to the

cost of eligible fixed assets.

d. Investments

Long-term investments are carried at cost less provision

for diminution other than temporary, if any, in value

of such investments. Current investments are carriedat lower of cost and market value.

e. Inventories

Inventories are valued at lower of cost and net

realisable value. Cost of finished goods and goods in

process are ascertained on weighted average basis. Cost

of raw material, chemicals and stores and spares

comprises purchase price (Net of Cenvat and other

deductible taxes wherever applicable), freight and

handling, duties and other attributable costs and is

valued on weighted average basis.

f. Sales

Income from sales is accounted for ex-mills/ex-depots

on despatch. The sale value is inclusive of excise duty,

but is exclusive of sales tax and is net of trade discount.

g. Employee benefits

Liability for employee benefits, both short term and

long term for present and past services which are due

as per terms of employment are accounted in

accordance with Accounting Standard 15 'Employee

benefits' as notified by Companies (Accounting

Standards) Rules, 2006.

The Company has a defined contribution plan for its

employees' retirement benefits comprising of provident

fund, superannuation fund, employees' state insurance

fund and employees' pension scheme (under the

provisions of Employees' Provident Funds and

Miscellaneous Provisions Act, 1952). The Company

contributes to provident fund, superannuation fund and

employees' state insurance fund and employees' pension

scheme and has no further obligations to the plan

beyond its contribution.

The Company has a defined benefit plan comprising of

gratuity fund, compensated absences and long term

service award. The lability for the gratuity, compensated

absence and long term service award is determined on

the basis of independent actuarial valuation. Liability

for gratuity is partly funded with a recognized gratuity

fund managed by Life Insurance Corporation of India.

Notes forming part of the Financial Statements1. CORPORATE INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES


h. Research & Development expenses

Revenue expenditure on research and development is

charged to Statement of Profit and Loss of the year in

which it is incurred. Capital expenditure on research &

development is included in the fixed assets.

i. Government grants

Grants received against specific fixed assets are

adjusted to the cost of asset and revenue grants are

recognised in the Statement of Profit and Loss in

accordance with the related scheme in the period in

which these are accrued and are deducted in reporting

the related expenses.

j. Depreciation

Fixed assets are depreciated on straight line method

at the rates specified in Schedule XIV to the Companies

Act, 1956. Depreciation on additions/deletions is

worked out on pro-rata basis.

Assets revalued have been depreciated on straight linebasis over the balance useful lives estimated by thevaluer and the excess of depreciation so calculatedover the depreciation calculated above is transferredfrom revaluation reserve.

k. Foreign currency transaction

Transactions denominated in foreign currencies arerecorded at the exchange rates prevailing at the timeof transaction.

Monetary assets and liabilities related to foreigncurrency transactions remaining unsettled at the endof year are translated at year end rates.

The difference in translation of monetary assets andliabilities and realised gain/losses to foreign exchange

transactions are recognized in the Statement of Profitand Loss.

l. Deferred tax

Deferred tax is accounted for by computing the taxeffect of timing differences that arise during the yearand reverse in subsequent periods.

m. Provisions and contingencies

Provisions involving substantial degree of estimationin measurement are recognized when there is presentobligation as a result of past events and it is probablethat there will be an outflow of resources. Contingentliabilities are not recognized but disclosed in the notes.Contingent assets are neither recognized nor disclosedin the financial statements.

n. Impairment of assets

The carrying amount of assets, other than inventories

is reviewed at each balance sheet date to determine

whether there is any indication of impairment, if any

such indication exists, the recoverable amount of the

assets is estimated. The recoverable amount is the

greater of the assets net selling price and value in use

which is determined based on the estimated futurecash flow discounted to their present values.

An impairment loss is recognised whenever the carrying

amount of an asset or its cash generating unit exceeds

its recoverable amount, impairment loss is reversed ifthere has been a change in the estimates used todetermine the recoverable amount.

o. Leases

Lease payments under operating lease are recognisedas an expense in the Statement of Profit and Loss on astraight line basis over the lease term.



` Lakhs

Particulars As at As atMarch 31, 2014 March 31, 2013

2. SHARE CAPITALAuthorised

2,50,00,000 Ordinary shares of `10 each 25,00.00 25,00.00

(March 31, 2013: 2,50,00,000 Ordinary shares of `10 each)

10,00,000 Preference shares of `100 each 10,00.00 10,00.00

(March 31, 2013: 10,00,000 Preference shares of `100 each)

35,00.00 35,00.00Issued

1,69,85,000 Ordinary shares of `10 each

(March 31, 2013: 1,69,96,174 Ordinary shares of `10 each) 16,98.50 16,99.62

Subscribed and fully paid up1,69,85,000 Ordinary shares of `10 each 16,98.50 16,43.50

(March 31, 2013: 1,64,35,000 Ordinary shares of `10 each)

Add: Forfeited shares (March 31, 2013: 9,154)(Amount originally paid up)

[Refer Note (d) below] 0.86 0.86

TOTAL 16,99.36 16,44.36

Notes:

Subscribed and paid up capital include:

a. Reconciliation of number of Ordinary shares and amount outstanding at the beginning and at the end of the year:

As at March 31, 2014 As at March 31, 2013Particulars Number of

` LakhsNumber of

` Lakhsshares shares

Balance at the beginning of the year 1,64,35,000 16,43.50 1,58,79,900 15,87.99

Add: Allotted during the year 5,50,000 55.00 5,55,100 55.51

Balance at the end of the year 1,69,85,000 16,98.50 1,64,35,000 16,43.50

b. Rights, preferences and restrictions attached to Ordinary shares:

The Ordinary shares of the Company, having par value of `10 per share, rank pari passu in all respects including votingrights and entitlement to dividend.

c. Shareholders holding more than 5% of the Ordinary shares along with the number of shares held is as given below:

As at March 31, 2014 As at March 31, 2013Name of the shareholder Number of

%Number of

%shares shares

Aravali Securities and Finance Limited 41,07,000 24.18 41,07,000 24.99

Amba Investment Private Limited 37,90,067 22.31 32,40,067 19.71

d. Details of cancelled forfeited shares:

As at March 31, 2014 As at March 31, 2013Class of shares No. of Amount No. of Amount

shares originally shares originallypaid up paid up

Ordinary shares with voting rights – 0.86 9,154 0.86



` Lakhs


3. RESERVES AND SURPLUS

Capital reserve

At the beginning and at the end of the year 9.16 9.16

Capital redemption reserve

At the beginning and at the end of the year 70.93 70.93

Securities premium account

Opening balance 72,29.97 70,46.78

Add: Premium on Ordinary shares issued during the year 1,81.50 1,83.19

Closing balance 74,11.47 72,29.97

Revaluation reserve


Less: Utilised for set off against depreciation (2,03.91) (1,63.70)

Less: Non-utilised portion, on account of assets sold,transferred to general reserve (0.33) (44.10)

Less: Loss on revalued fixed assets retired from active use/sold – (3,40.73)


General reserve


Add: Transfered from revaluation reserve 0.33 44.10


Deficit in the Statement of Profit and Loss

Opening balance (112,63.15) (15,53.33)

Add: Loss for the year (90,98.15) (97,09.82)

Closing balance (203,61.30) (112,63.15)

TOTAL (2,68.56) 88,52.00



` Lakhs

Non-current portion Current maturitiesParticulars As at As at As at As at

March 31, 2014 March 31, 2013 March 31, 2014 March 31, 2013

4. LONG-TERM BORROWINGSa. Term loans

From banksSecured [Refer Notes (ii) to (vi) below]

Rupee loans 287,50.90 286,25.05 28,19.06 4,35.91

Vehicle loans 5.20 8.89 3.69 3.31

b. Deferred payment liabilitiesUnsecured [Refer Note (vii) below]

Sales tax deferment loans 27,59.42 22,11.95 – –

TOTAL 315,15.52 308,45.89 28,22.75 4,39.22

Notes:

i. Current maturities of long-term borrowings are included in 'Other current liabilities' in Note 10.

ii. Pursuant to the Company's application for restructuring of its existing debts, the final restructuring package was approved byCDR-EG and implemented last year. As per the approved scheme, a moratorium period of 21 months, commencing from April2012 to December 2013, was granted. Interest accrued and due on term loans aggregating to `58,75.22 Lakhs (March 31,2013: `33,66.21 Lakhs) is converted to Funded Interest Term Loan (FITL) and included in the Rupee loan above.

iii. The nature of security and terms of repayment for long-term secured borrowings as per the approved CDR package is givenbelow:

Nature of security Terms of repayments

a. Term loan from banks amounting to `315,69.96 Lakhs (March 31,2013: `290,60.96 Lakhs) is secured/to be secured by first pari passucharge on immovable and movable fixed assets both present andfuture and a pari passu second charge on entire current assets ofthe Company both present and future.

b. Pledge of entire shareholding of the promoters viz. Shri Ranjan Kumar Poddar, M/s. Aravali Securities & Finance Limitedand M/s. Amba Investment Private Limited, along with their voting rights on pari passu basis.

c. Irrevocable and unconditional personal guarantee of Shri Ranjan Kumar Poddar and Shri Devashish Poddar in favour ofthe lenders.

iv. Term loans from banks include `315,69.96 Lakhs (March 31, 2013: `290,60.96 Lakhs) which are optionally convertible by thelenders into fully paid Ordinary shares in the event of default in repayment of principal amount of loan or interest thereon orany combination thereof.

v. The Company has defaulted in repayment of loan and interest in respect of the following:

As at March 31, 2014 As at March 31, 2013Particulars Period of default ` Lakhs Period of default ` Lakhs

(Days) (Days)

Term loans from bank

Principal 1 4,35.73 – –

Interest 31-60 5,50.52 – –

Repayable in 33 quarterly instalments. Lastinstalment due on March 31, 2022. Rate ofinterest ranges from 11.00% to 15.05% p.a.


vi. Vehicle loan is repayable in 27 monthly instalments ending in June, 2016.

vii. As per final eligibility certificate of Commissioner of Industries, Hyderabad, the sales tax payable on the sale of productsmanufactured by the Company over and above the annual turnover of `184,65.00 Lakhs is eligible for deferment up to a


` Lakhs


5. DEFERRED TAX LIABILITIES (NET)Tax effect of items constituting deferred tax liabilities

Difference between book balance and tax balance of fixed assets 56,98.27 56,46.99

Tax effect of items constituting deferred tax assetsUnabsorbed depreciation carried forward (56,98.27) (56,46.99)

Deferred tax liability (Net) – –

Notes:The Company has recognised deferred tax asset on unabsorbed depreciation and/or brought forward business losses to the extentof the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assetsunder income tax. As such, deferred tax assets (net) amounting to `49,18.12 Lakhs (March 31, 2013: `24,72.98 Lakhs), has notrecognised in the absence of virtual certainty that sufficient future taxable income will be available against which such deferredtax assets can be realised.


6. OTHER LONG-TERM LIABILITIESDeposits - from customers 34,98.74 35,68.24

- from capital vendors 4,58.52 4,93.32

TOTAL 39,57.26 40,61.56


7. LONG-TERM PROVISIONSProvision for employee benefits

Gratuity [Refer Note (a) below] 4,89.07 4,46.61

Compensated absences [Refer Note (b) below] 2,28.75 2,57.32

Long service award [Refer Note (c) below] 1,50.65 1,61.04

TOTAL 8,68.47 8,64.97

Notes:

a. The gratuity fund is invested in a group gratuity cash accumulation policy offered by Life Insurance Corporation of India(LIC). The investment returns earned on the policy comprises bonus declared by LIC having regard to LIC's investmentearnings. The information at the allocation of fund into major asset classes and expected return to each major class are notreadily available. LIC's overall portfolio of assets is well diversified and as such, the long term return on the policy is expectedto be higher than the rate of return on central government bonds.

b. Provision for compensated absences (leave liability) is made on the basis of actuarial valuation and the same is unfunded.

c. Provision for retirement exgratia (long service award) is made on the basis of actuarial valuation and the same is unfunded.


maximum of `65,45.85 Lakhs. The deferment is to be availed in 14 financial years commencing from March 21, 2002 toMarch 20, 2016. Each year's deferment is payable after 14 years from the year of deferment, without interest. Based on theabove, the Company has deferred payment of sales tax liability aggregating to `30,01.58 Lakhs till March 31, 2014(March 31, 2013: `24,54.11 Lakhs).

The Company has received a demand of `2,42.16 Lakhs (March 31, 2013: `2,42.16 Lakhs) from the sales tax departmenttowards excess deferment availed, which is grouped under statutory remittances in Note 10.


` Lakhs


8. SHORT-TERM BORROWINGSLoans repayable on demandFrom banksSecured [Refer Note (a) to (c) below] 38,18.95 34,74.41

TOTAL 38,18.95 34,74.41Notes:a. Short-term borrowings from banks are secured by a pari passu first charge on the entire current assets both present and future

and pari passu second charge on entire fixed assets both present and future of the Company, and;

b. Pledge of entire shareholding of the promoters viz. Shri Ranjan Kumar Poddar, M/s. Aravali Securities & Finance Limited andM/s. Amba Investment Private Limited, along with their voting rights on pari passu basis, and;

c. Irrevocable and unconditional personal guarantee of Shri Ranjan Kumar Poddar and Shri Devashish Poddar in favour of the lenders.


9. TRADE PAYABLEAcceptances 16.65 2.04

Other than acceptances 94,53.21 80,37.90

TOTAL 94,69.86 80,39.94


10. OTHER CURRENT LIABILITIESCurrent maturities of long term debt [Refer Note 4 (ii) to (v)] 28,22.75 4,39.22Interest accrued but not due on borrowings 3,17.80 –Interest accrued and due on borrowings 5,50.52 –Investor Education & Protection Fund (Refer Note below) 11.52 16.67Other payables

Statutory remittances 9,20.76 8,37.29Advances from customers and vendors 3,80.34 79.30Interest accrued on others [Refer Note 28 (b)] 39.30 30.32

Other liabilities 1,70.76 1,77.35

TOTAL 52,13.75 15,80.15

Note:Investor Education and Protection Fund represents unclaimed dividend required to be transferred to this fund on completion ofseven years. No such amount is due for deposit as on the Balance Sheet date.


11. SHORT-TERM PROVISIONSProvision for employee benefits

Gratuity 1,09.84 1,10.00

Compensated absences 43.02 38.20

Long service award 30.62 27.56

Others 1.30 1.00

TOTAL 1,84.78 1,76.76



12. FIXED ASSETS ` Lakhs

Gross block (At cost/revalued)* Depreciation Net block

Particulars As at Additions Deletions As at Upto For the Deletions/ Upto As at As atMarch 31, March 31, March 31, year Adjust- March 31, March 31, March 31,

2013 2014 2013 ments 2014 2014 2013

A. TANGIBLE ASSETS

Freehold land 11,22.96 – – 11,22.96 – – – – 11,22.96 11,22.96(11,22.96) – – (11,22.96) – – – – (11,22.96) (11,22.96)

Buildings

Own use 68,77.96 2.41 11.02 68,69.35 35,88.47 1,19.80 11.00 36,97.27 31,72.08 32,89.49 (70,09.66) (1,23.28) (2,54.98) (68,77.96) (36,06.47) (1,22.21) (1,40.21) (35,88.48) (32,89.49) (34,03.19)

Given underoperating lease 24.70 – – 24.70 1.56 0.40 – 1.96 22.74 23.14

(24.70) – – (24.70) (1.16) (0.40) – (1.56) (23.14) (23.54)

69,02.66 2.41 11.02 68,94.05 35,90.03 1,20.20 11.00 36,99.23 31,94.82 33,12.63 (70,34.36) (1,23.28) (2,54.98) (69,02.66) (36,07.63) (1,22.61) (1,40.21) (35,90.03) (33,12.63) (34,26.73)

Plant & machinery 656,40.57 11,53.33 1,30.92 666,62.98 285,81.65 29,16.18 1,27.55 313,70.28 352,92.70 370,58.92 (665,67.99) (9,08.58) (18,36.00) (656,40.57) (267,03.06) (29,09.72) (10,31.13) (285,81.65) (370,58.92) (398,64.93)

Furniture & fixtures 2,30.19 0.19 0.33 2,30.05 1,00.94 11.04 0.32 1,11.66 1,18.39 1,29.25 (2,29.51) (0.72) (0.04) (2,30.19) (89.31) (11.67) (0.04) (1,00.94) (1,29.25) (1,40.20)

Vehicles 1,97.03 – 17.70 1,79.33 1,09.06 16.27 16.82 1,08.51 70.82 87.97 (3,27.27) (6.36) (1,36.60) (1,97.03) (1,75.13) (24.69) (90.76) (1,09.06) (87.97) (1,52.14)

Office equipment 1,73.40 1.55 2.53 1,72.42 91.14 7.05 2.01 96.18 76.24 82.26 (1,70.03) (5.24) (1.87) (1,73.40) (85.33) (7.19) (1.38) (91.14) (82.26) (84.70)

Railway sidings 13.99 – – 13.99 9.52 0.59 – 10.11 3.88 4.47 (13.99) – – (13.99) (8.92) (0.60) – (9.52) (4.47) (5.07)

TOTAL (A) 742,80.80 11,57.48 1,62.50 752,75.78 324,82.34 30,71.33 1,57.70 353,95.97 398,79.81 417,98.46 (754,66.11) (10,44.18) (22,29.49) (742,80.80) (306,69.38) (30,76.48) (12,63.52) (324,82.34) (417,98.46) (447,96.73)

B. INTANGIBLE ASSETS

Software 55.75 11.48 2.54 64.69 33.71 16.78 – 50.49 14.20 22.04 (55.75) – – (55.75) (19.49) (14.22) – (33.71) (22.04) (36.26)

TOTAL (A+B) 743,36.55 11,68.96 1,65.04 753,40.47 325,16.05 30,88.11 1,57.70 354,46.46 398,94.01 418,20.50 (755,21.86) (10,44.18) (22,29.49) (743,36.55) (306,88.87) (30,90.70) (12,63.52) (325,16.05) (418,20.50) (448,32.99)

Figures in brackets and in italics relate to the previous year.

* Certain assets like land, building and plant & machinery were revalued as on March 31, 1997 on the basis of reports of approved valuer on market value/replacement cost basis using standard indices after considering the obsolescence and age of individual assets. The revalued amount (net of withdrawals)remaining substituted for the historical cost in the gross block of fixed assets are:

` Lakhs

As at As atParticulars March 31, March 31,

2014 2013

Land 9,65.36 9,65.36

Buildings 41,92.55 42,03.58

Plant & machinery 148,84.17 150,05.98

TOTAL 200,42.08 201,74.92



` Lakhs


13. NON-CURRENT INVESTMENTS (At cost)

Equity investments (Unquoted, fully paid up)1,67,500 (March 31, 2013: 1,67,500) equity shares of `10 each of

Neptune Paper Mills Limited (in liquidation) 16.75 16.75

Equity investments (Unquoted, partly paid up)60,000 (March 31, 2013: 60,000) equity shares of `100 each

(paid-up `5 per share) of Beloit India Limited (in liquidation) 1.18 1.18

17.93 17.93Less: Provision for diminution in the value of investments (17.93) (17.93)

TOTAL – –


15. INVENTORIES (at lower of cost and net realisable value)

Raw materials 5,73.19 11,50.02

Work-in-progress (Refer Note below) 8,84.73 8,60.17

Finished goods 17,75.38 2,99.53

Stores, spares and other consumables 13,63.78 16,79.11

Stock-in-transit (Stores & spares) 14.57 1,06.73

TOTAL 46,11.65 40,95.56

Note: Work-in-progress represents paper and paper board.


14. LONG-TERM LOANS AND ADVANCES (Unsecured and considered good)

Capital advances 1,60.46 2,17.97

Security and other deposits 17,34.08 17,06.03

Advance tax and tax deducted at source 2,51.00 2,11.55

[Net of provision `3,72.27 lakhs (March 31, 2013: `3,73.57 lakhs)]

TOTAL 21,45.54 21,35.55



` Lakhs


16. TRADE RECEIVABLESOutstanding for a period exceeding six monthsfrom the date they were due for payment

Secured, considered good (Refer Note below) 55.90 58.40

Unsecured, considered good 1,83.37 1,02.84

Unsecured, considered doubtful 56.62 56.62

Less: Provision for doubtful debts (56.62) (56.62)

2,39.27 1,61.24Other trade receivables

Secured, considered good (Refer Note below) 27,96.09 30,35.81

Unsecured, considered good 29,72.20 31,44.57

TOTAL 60,07.56 63,41.62

Note: Trade receivables are secured by way of security deposit collected from the customers to the extent of `28,51.99 Lakhs(March 31, 2013: `30,94.21 Lakhs).


17. CASH AND BANK BALANCESA. Cash and cash equivalents

Cash in hand 18.49 20.16

Balances with banks

- in current account 45.16 2,69.31

Total - Cash and cash equivalents (A) 63.65 2,89.47B. Other bank balances

- in earmarked accounts

- unpaid dividend account 11.53 16.67

- balances held as margin money deposit (Refer Note below) 72.41 62.31

- in redemption account 1.31 1.32

Total - Other bank balances (B) 85.25 80.30Total cash and bank balances (A+B) 1,48.90 3,69.77

Note: Includes deposits of `7.67 Lakhs (March 31, 2013: `2.57 Lakhs) with original maturity of more than 12 months.



` Lakhs


18. SHORT-TERM LOANS AND ADVANCESUnsecured, considered goodInter-corporate deposits 8,25.00 8,25.00

Loans and advances to employees 27.31 35.79

Prepaid expenses 45.01 52.55

Advance to material suppliers/contractors/others 13,34.61 16,08.19

Balance with government authorities - CENVAT credit receivable 75.26 96.47

TOTAL 23,07.19 26,18.00


19. OTHER CURRENT ASSETSAccruals

Interest accrued on inter-corporate deposits 97.77 1,00.78

Interest accrued on security deposits 1,20.05 88.28

Interest accrued on trade receivables 39.10 56.60

OthersClaims recoverable 8,37.50 7,27.05

Fixed assets retired from active use [Refer Note 28 (c)] 2,50.12 2,50.12

TOTAL 13,44.54 12,22.83



` Lakhs


20. GROSS REVENUE FROM OPERATIONSSale of paper and paper board 444,34.33 372,44.31

TOTAL 444,34.33 372,44.31


21. OTHER OPERATING REVENUESale of coal ash and scrap 2,93.62 4,07.60

TOTAL 2,93.62 4,07.60


22. OTHER INCOMEInterest on

- Term deposits with banks 42.68 68.52

- Inter-corporate and other loans 98.08 1,00.78

- Others (customers/debtors, on deposits, etc.) 5,23.03 6,84.93

Rent 35.61 46.46

Insurance claims 14.14 35.68

Profit on sale of fixed assets 3.69 91.95

Profit on sale of current investments – 42.61

Miscellaneous income 2,93.01 48.68

TOTAL 10,10.24 11,19.61

Tax deducted at source on interest received is `26.40 Lakhs (March 31, 2013: `50.69 Lakhs)


23. COST OF MATERIALS CONSUMED

Opening stock 11,50.02 18,03.85

Add: Purchases 237,51.06 165,81.74

249,01.08 183,85.59

Less: Closing stock (5,73.19) (11,50.02)

TOTAL 243,27.89 172,35.57

Material consumed comprises:Bamboo and wood 183,79.38 119,12.20

Chemicals and fibres 52,25.11 47,68.25

Packing material 7,23.40 5,55.12

TOTAL 243,27.89 172,35.57



` Lakhs


24. CHANGES IN INVENTORIES OF FINISHED GOODS AND STOCK-IN-PROCESSOpening stock-in-process 8,60.17 7,71.07

Opening finished goods 2,81.95 5,08.18

11,42.12 12,79.25

Closing stock-in-process 8,84.73 8,60.17

Closing finished goods 16,74.11 2,81.95

25,58.84 11,42.12

Adjustment for excise duty on stock 83.69 (13.25)

Net (increase)/decrease in stock (15,00.41) 1,50.38


25. EMPLOYEE BENEFITS EXPENSESalaries and wages 61,67.81 59,81.45

Contribution to provident and other funds 5,83.48 5,36.33

Workmen and staff welfare expenses 2,11.55 1,92.53

TOTAL 69,62.84 67,10.31


26. FINANCE COSTSInterest expense

- On borrowings 43,23.40 39,48.21

- On others 4,32.65 4,37.31

Other borrowing cost 66.41 1,02.27

TOTAL 48,22.46 44,87.79



` Lakhs


27. OTHER EXPENSES

Stores and spares consumed 14,66.36 17,19.99

Power and fuel 107,95.13 106,20.90

Repairs and maintenance

- Buildings 2,06.11 2,29.04

- Plant & machinery 5,86.29 7,13.81

- Other assets 35.36 23.86

Insurance 91.41 78.53

Rent 26.24 26.67

Lease rent [Refer Note 28 (m)] 18.00 18.00

Rates & taxes 46.42 20.23

Freight, carriage and cartage charges 4,04.56 4,18.34

Vehicle expenses 46.61 48.16

Travelling and conveyance expenses 1,06.56 1,36.81

Legal & professional expenses 67.62 1,83.14

Commission to wholesalers 4,01.43 3,87.13

Communication and advertisement 49.64 58.43

Conversion charges 62.20 62.74

Directors' sitting fees* 2.32 3.68

Increase/(decrease) of excise duty on inventory 83.69 (13.25)

Auditors' remuneration [Refer Note 28 (g)] 12.90 14.71

Loss on fixed assets retired from active use [Refer Note 28 (c)] – 3,43.95

Miscellaneous expenses 1,51.13 1,83.55

TOTAL 146,59.98 152,78.42*Directors' sitting fees excludes service tax and education cess thereon.



28. Notes forming part of the financial statements

a. Contingent liabilities & commitments

Contingent liabilities

i. Claims/demands under dispute not provided for


Claims/demands under disputeIncome tax 76.73 75.33

Excise duty etc. 8,71.28 6,09.51

Value added tax 3,24.56 3,24.56

Demand from Government of Andhra Pradesh@ 22,01.67 22,01.67

State levies 9,41.77 9,41.77

Labour related cases 3,51.32 3,51.32

Suppliers and service contracts 7,75.44 7,68.54

@ Includes interest demand of `12,25.52 Lakhs from the Forest Department, Government of Andhra Pradesh on delayed payment ofdifferential royalty which had been levied for the period 1980-81 to 1984-85. The Company has contested this demand in theHon'ble High Court of Andhra Pradesh and in terms of the order of the court a sum of `1,00 Lakhs has been deposited and a corporateguarantee has been given for the balance amount. Based on the legal opinion, the management is hopeful of a decision in its favourand consequently, no provision has been made in the financial statement for the above mentioned demand.

ii. Show cause notices were issued by Central Excise Department claiming full rate of duty on clearance of paper & paper boardat concessional rate during the period from September 1994 to September 1999. The amount involved, as per show causenotices, is `18,08 Lakhs. The case was adjudicated by the Commissioner of Customs & Central Excise in Company's favour inJuly, 2005 dropping all the proceedings, interest, penalty, duty. However, the department has gone on an appeal to CESTATagainst the order of Commissioner. Pending the final outcome of the petition, no provision has been made.

iii. Government of Andhra Pradesh had levied electricity duty on power generated and consumed for captive use with effectfrom July 17, 2003 @ `0.25 paise per unit of power generated. The Company had filed a writ petition against the saidlevy in the Hon'ble High Court of Andhra Pradesh which had granted a stay. Pending the final outcome of the petition,no provision has been made.

iv. Northern Power Distribution Company Limited of Andhra Pradesh (NPDCL) has raised a demand for `9,13.34 Lakhstowards back billing alleging non segregation of lights and fans load for the period 2007 to 2012. On a petition filed bythe Company, the Hon'ble High Court has granted interim suspension of the demand and observed that the Company hasalready deposited `1,00 Lakhs which covers the billing for 12 months maximum permissible under the circumstances.Pending the final outcome of the petition, no provision has been made.

v. As per paragraph 3.7 of 'CDR Master Circular 2012 - Clause 3 Scrutiny before CDR reference/approval', lenders shall havethe right to recompense for their sacrifices proposed in the CDR package. The amount of recompense as at March 31,2014 works out to `7,85.12 Lakhs (March 31, 2013: `3,67.56 Lakhs).

Commitments

i. Estimated amount of contracts remaining to be executed on capital account and not provided for Nil (March 31, 2013:`1,11.11 Lakhs) against which advances paid amount to Nil (March 31, 2013: `2.48 Lakhs).

ii. Estimated amount of contracts remaining to be executed on other than capital commitments and not provided for`4,76.66 Lakhs (March 31, 2013: `4,24.98 Lakhs).

iii. Total outstanding bank guarantees and letters of credit as on March 31, 2014, aggregated to `8,90.19 Lakhs(March 31, 2013: 10,08.76 Lakhs), which are secured against the Company’s assets.

` Lakhs



` Lakhsb. Details as required under MSMED Act, 2006


The principal amount remaining unpaid at the end of the year 1,19.81 41.71

The interest due on above 5.00 3.50

The amount of interest paid by the buyer along with amount of thepayment made to the suppliers beyond the appointed date Nil Nil

The amount of interest due and payable for the period of delay inmaking payment (which have been paid but beyond the due dateduring the year) but without adding interest specified under the Act 3.98 6.04

Amount of interest accrued and remaining unpaid at the end of the year 39.30 30.32

c. Details of fixed assets retired from active use@

As at Net realisable Loss on fixed Loss adjustedParticulars March 31, 2014 value (NRV) assets retired from unutilised

from active use revaluation reserveBuilding - factory structure 37.97 37.97 – –

(99.08) (37.97) (61.11) –

Plant & machinery 1,81.24 1,81.24 – –

(7,91.87) (1,81.24) (2,81.70) (3,28.93)

Vehicles 30.91 30.91 – –

(32.05) (30.91) (1.14) –

TOTAL 2,50.12 2,50.12 – –(9,23.00) (2,50.12) (3,43.95) (3,28.93)

@ Net book value including revaluation.

Figures in brackets and in italics are for the previous year.

d. CIF value of imports


Components and spare parts 1,50.84 1,68.05

e. Expenditure in foreign currency


Books & periodicals 0.09 0.09

Travelling expenses – 4.53

Consultancy 3.78 29.76

Raw materials & machine spares 1,47.78 1,34.64

TOTAL 1,51.65 1,69.02



` Lakhsf. Details of imported and indigenous items consumed during the year

Material consumed (Raw material, stores and chemicals)Particulars For the year ended For the year ended

March 31, 2014 March 31, 2013Amount % Amount %

Indigenous 256,79.40 99.55 187,20.60 98.76

Imported 1,14.85 0.45 2,34.96 1.24

TOTAL 257,94.25 100.00 189,55.56 100.00

g. Auditors' remuneration


Statutory auditorsAudit fees 7.00 7.00

Fees for limited review 5.25 5.25

Fees for certification – 0.50

Reimbursement of expenditure 0.65 1.96

TOTAL 12.90 14.71

Note: The above excludes service tax and education cess thereon.

h. As per the provisions of Industrial Investment Promotion Policy 2005-10 of Government of Andhra Pradesh, the Company iseligible for part reimbursement of power consumption charges. Necessary claim from May 1, 2008 to April 30, 2013 have beenfiled with relevant authorities. The amount so eligible aggregating to `7,93.26 Lakhs (March 31, 2013: `6,82.81 Lakhs) isincluded in other current assets under Note 19 with a corresponding credit to power and fuel expenses, in respective years.

i. The wage agreement with workers’ union covering the period from April 1, 2008 to March 31, 2013 has expired and a newagreement is yet to be concluded. Pending conclusion of such agreement, possible impact on the financials is not ascertainable.

j. Employee benefit plans

i. Defined contribution plans


Provident fund 1,77.27 1,68.31

Superannuation fund 12.79 17.27

Employees’ state insurance 1,19.18 1,20.70

Employees’ pension scheme 1,21.95 1,28.70



ii. Defined benefit plans

a. Change in defined benefit obligations (DBO) during the year

For the year ended March 31, 2014Particulars

Gratuity Compensated Long service awardabsences

Present value of (DBO) at the beginning of the year 23,86.62 2,95.52 1,88.6023,62.56 3,62.28 1,64.76

Current service cost 1,14.69 27.13 11.361,11.00 27.80 11.76

Interest cost 1,90.93 23.64 15.091,89.00 28.98 13.18

Actuarial losses/(gains) 9.52 8.17 (14.35)(18.95) (61.00) 11.24

Benefits paid (2,42.99) (82.69) (19.43)(2,56.99) (62.54) (12.34)

Present value of (DBO) at the end of the year 24,58.77 2,71.77 1,81.2723,86.62 2,95.52 1,88.60

b. Change in the fair value of assets during the year



Plan assets at the beginning of the year 18,30.01 NA NA19,06.13 NA NA

Actual return on plan assets 1,62.85 NA NA1,79.70 NA NA

Actual Company's contribution 1,10.00 82.69 19.431.17 62.54 12.34

Benefits paid (2,42.99) (82.69) (19.43)(2,56.99) (62.54) (12.34)

Present value of (DBO) at the end of the year 18,59.86 NA NA18,30.01 NA NA

c. Net asset/(liability) recognised in the Balance Sheet as at end of the year



Present value of defined benefit obligations 24,58.77 2,71.77 1,81.2723,86.62 2,95.52 1,88.60

Fair value of plan assets 18,59.86 NA NA18,30.01 NA NA

Funded status - surplus/(deficit) (5,98.91) (2,71.77) (1,81.27)(5,56.61) (2,95.52) (1,88.60)

Net asset/(liability) recognised in Balance Sheet (5,98.91) (2,71.77) (1,81.27)(5,56.61) (2,95.52) (1,88.60)

Note: Figures in italics relate to the previous year.

` Lakhs



d. Components of employers’ expenses



Current service cost 1,14.69 27.13 11.361,11.00 27.80 11.76

Interest cost 1,90.93 23.64 15.091,89.00 28.98 13.18

Expected return on plan assets (1,55.55) NA NA(1,62.02) NA NA

(Gain)/actuarial losses 2.22 8.17 (14.35)(36.63) (61.00) 11.24

Expenses/(income) recognized in Statement of Profit and Loss 1,52.29 58.94 12.101,01.35 (4.22) 36.18

e. Actual contribution and benefit payments for the year



Actual benefit payments 2,42.99 82.69 19.432,56.99 62.54 12.34

Actual contributions 1,10.00 82.69 19.431.17 62.54 12.34

f. Experience adjustments

Gratuity 2013-14 2012-13 2011-12 2010-11

Present value of DBO 24,58.77 23,86.62 23,62.56 22,69.67

Fair value of plan assets 18,59.86 18,30.01 19,06.13 16,57.09

Funded status [surplus/(deficit)] (5,98.91) (5,56.61) (4,56.43) (6,12.58)

Experience gain/(loss) adjustmentson plan liabilities (9.52) 18.95 (19.51) –

Experience gain/(loss) adjustmentson plan assets 7.30 17.68 23.20 –

g. Principal actuarial assumptions



Discount rate % 8.0 8.0 8.0% 8.0 8.0 8.0

Expected return on plan assets % 8.5 NA NA% 8.5 NA NA

Salary escalation - Staff % 8.0 8.0 8.0% 8.0 8.0 8.0

- Workers % 7.0 7.0 7.0% 7.0 7.0 7.0

Note: Figures in italics relate to the previous year.

` Lakhs


` Lakhs

k. Segment information

The Company is in the business of manufacture and sale of pulp, paper and paper board. The power produced is for captiveuse. Considering the core activities of the Company, management is of the view that manufacture and sale of pulp, paper andpaper boards is a single reportable business segment and hence information relating to primary segment is not required to bedisclosed.

l. Related party disclosure

List of related party and relationships

Party Relation

Aravali Securities and Finance LimitedEntities holding more than 20%Amba Investment Private Limited

Key management personnel

Shri Rameshwar Lall Lakhotia Executive Director

Shri Devashish Poddar Vice-Chairman & Managing Director

Summary of transactions with the above related parties

Entities KeyTransactions holding more management

than 20% personnel

Interest income 35.00 – –

(35.00) – –

Lease rent paid 18.00 – –

(18.00) – –

Rent, office maintenance, food charges & expenses 5.64 – –

(6.38) (23.06) –

Management contracts – – 1,13.74

– – (1,45.60)

Reimbursement of expenses 2.53 – –

(2.93) – –

Issue of shares (including securities premium) – 2,36.50 –

– (2,38.69) –

Unsecured short-term loan received – – –

(2,50.00) – –

Unsecured short-term loan paid – – –

(2,50.00) – –

Note: Pending approval of Central Government relating to appointment & remuneration of Managing Director & ExecutiveDirector, remuneration payable aggregating to `47.65 Lakhs (March 31, 2013: `8.26 Lakhs) is not provided for in thebooks of accounts.


Managerial personnelalong with their

relative exercisingsignificant influence


}


` LakhsYear end balances

Entity holding KeyTransactions more than management

20% personnel

Payable 0.79 – 11.44

– – (12.13)

Receivable 3,70.08 – –

(3,68.09) (3.25) –

Note: Related parties are as identified by the Company based on information available and relied upon by auditors.


m. The Company's significant leasing arrangement are in respect of operating leases for premises (residential, office, stores,godown etc.). These leasing arrangements which are not non-cancellable range between 11 months and 3 years generally orlonger, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable arecharged as lease rent under Note 27.

n. Loss per share


Loss after tax as per accounts (` lakhs) (90,98.15) (97,09.82)

Opening balance of Ordinary shares 1,64,35,000 1,58,79,900

Shares allotted during the year 5,50,000 5,55,100

Weighted average number of shares (Nos.) 1,67,81,575 1,59,71,149

Loss per share (`) (54.22) (60.80)

o. As at March 31, 2014, the accumulated losses amounted to `203,61 Lakhs has eroded the net worth of the Company. TheCompany has the continuous support from the promoters and has put in place measures for revival and cost reduction, whichin the opinion of the management would enable the Company to generate sufficient profits in the foreseeable future.

p. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.

Managerial personnelalong with their

relative exercisingsignificant influence


For and on behalf of the Board of Directors

Ranjan Kumar Poddar Devashish PoddarVimal Arora Chairman Vice-Chairman &Chief Financial Officer Managing Director



THE SIRPUR PAPER MILLS LIMITEDRegistered Office: 5-9-22/1/1, 1st Floor

Ashoka Chambers, Adarshnagar, Hyderabad - 500 063Website: www.sirpurpaper.com

Mr./Ms. ...............................................................

...............................................................

...............................................................

...............................................................

ATTENDANCE SLIP

DayDateTime

Venue

Monday

September 29, 2014

12.30 p.m.

Bhaskara AuditoriumB.M. Birla Science CentreAdarshnagar, Hyderabad-500 063

Demat ParticularsDP ID No.

Client ID No.

I hereby record my presence atthe 75th ANNUAL GENERALMEETING of the Company

Signature of the Member or Proxy○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

MEMBER PROXY

(Please tick as applicable)

Note: 1. Only Members of the Company or their proxies will be allowed to attend theMeeting ON PRODUCTION OF ATTENDANCE SLIP duly completed and signed.

2. Please fill this admission slip and hand it over at the entrance of the hall duly signed.

3. Members are requested to bring their copies of Annual Report with them.

4. Members who hold shares in dematerialised form are requested to bring theirClient ID and DP ID numbers for easy identification of attendance at the Meeting.

I/We ...................................................................................................................................................................

of.......................................................................................................................................................................

being Member(s) of THE SIRPUR PAPER MILLS LIMITED hereby appoint.........................................................................

of........................................................................................................................................... or failing him/her

.....................................................................................................................................................................

of ..................................................................................................................................................................

as my/our proxy to vote for me/us on my/our behalf at the 75th ANNUAL GENERAL MEETING of the Company to be heldat 12.30 p.m. on Monday, the September 29, 2014 at Bhaskara Auditorium, B.M. Birla Science Centre, Adarshnagar,Hyderabad-500 063 and at any adjournment thereof.

Date........................... Signature.............................................................

Affix a15 paiseRevenueStamp

(Address)

(Address of proxy)

(Name of alternate proxy)

(Address of alternate proxy)

✂

✂

Note: The Proxy in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of the Companynot less than 48 hours before the time for holding the aforesaid Meeting. The Proxy need not be a member of the Company.

No. of Shares

FORM OF PROXY

No. of Shares

Demat ParticularsDP ID No.

Client ID No.

Reg. Folio No.✂

(Name of Member)

(Name of proxy)

Tear

Her

e

THE SIRPUR PAPER MILLS LIMITEDRegistered Office: 5-9-22/1/1, 1st Floor

Ashoka Chambers, Adarshnagar, Hyderabad - 500 063Website: www.sirpurpaper.com

Reg. Folio No.

1


2


3

Notice

20

Directors’ Report

28


34


AnnualReport

Contents

46


50

Balance Sheet

51

Statement of Profit and Loss

52

Cash Flow Statement

54


75

Proxy Form

This Annual Report has been printed on maplitho paper manufactured byThe Sirpur Paper Mills Limited.

Design and production by CAPRICORN, Hyderabad

Forward Looking Statements

The Annual Report contains statements that

constitute forward looking statements including,

without limitation, statements relating to the

implementation of strategic initiatives and other

statements relating to our future business

developments and economic performance.

While these forward looking statements

represent our judgements and future

expectations concerning the development of our

business, a number of risks, uncertainties and

other important factors could cause actual

developments and results to differ materially

from our expectations.

These factors include, but are not limited to,

general market, macro-economic, governmental

and regulatory trends, movements in currency

exchange and interest rates, competitive

pressures, technological developments, changes

in the financial conditions of third parties

dealing with us, legislative developments, and

other key factors that we have indicated could

adversely affect our business and financial

performance.

The Company undertakes no obligation to

publicly revise any forward looking statements

to reflect future events or circumstances.


AnnualReport

2013-14

www.sirpurpaper.com

the sirpur paper mills limited › bse_annualreports › 5024550314.pdf · the sirpur paper mills...

Documents